The short answer
A time deposit or certificate of deposit (CD) at a foreign bank — what many people call a 定存, 定期存款, or fixed deposit — is a foreign financial account. It counts toward the FBAR $10,000 aggregate test like any other foreign bank account, and it can be a specified foreign financial asset for Form 8938. There is no special "CD exemption" in the official guidance reviewed for this guide.
The interest it earns is a separate matter: it is income reported on your tax return.
Why a time deposit is an "account"
The FBAR regulation defines a bank account broadly, as a savings deposit, demand deposit, checking, or any other account maintained with a person engaged in the business of banking. IRS guidance lists time deposits (CDs) among reportable bank accounts. The IRS comparison of the two forms treats financial (deposit and custodial) accounts held at foreign financial institutions as reportable on both the FBAR and Form 8938, subject to each form's thresholds.
| Question | FBAR | Form 8938 |
|---|---|---|
| Is a foreign time deposit covered? | Yes — a bank account | Yes — a deposit account at a foreign financial institution |
| Threshold | Aggregate of all foreign accounts over $10,000 at any time | Your Form 8938 threshold (much higher; depends on filing status and where you live) |
| Value reported | Maximum value during the calendar year | Maximum value during the tax year (Form 8938 rules) |
| Where filed | FinCEN, through BSA E-Filing | Attached to your income tax return |
Valuing a time deposit
Use the account's maximum value during the year — a reasonable approximation of the greatest value at any time. For a deposit that renews, the maximum may come right after interest is added at a rollover. Convert to U.S. dollars at the Treasury rate for the last day of the calendar year. See What is the maximum value of a foreign account for FBAR?
Example
Grace, a U.S. resident, keeps a savings account in Taiwan with a maximum value of $4,000 and a one-year time deposit worth $8,200 at its peak (both converted at the year-end Treasury rate). Neither account reaches $10,000, but together they total $12,200, so she files an FBAR reporting both. Her foreign assets are far below the Form 8938 threshold. Separately, she reports the time deposit's interest, in U.S. dollars, on her tax return.
The interest is income
U.S. citizens and residents are taxed on worldwide income, so time-deposit interest is reportable income. If the foreign bank withheld tax, you may be able to claim a foreign tax credit for qualifying foreign income taxes. See Do I need to report a Taiwan or foreign bank account?
Time-deposit slips, renewal notices, and interest statements show the principal, rollover dates, and interest — exactly what you need for both the maximum value and the interest you report.