Yes you can, and I do keep my extension money in a term deposit account.
That said the IO officer can be twitchy about the lack of 'movement', they ask you to have your passbook updated on the day of application, at least Hat Yai do, but with term deposit I can't make a transaction on the day to show a total for that day in the passbook. Some officers seem to understand this, others are a little less bright shall we say. Bringing the balance up on the banking app to show the money is there has helped, as does doing the bank letter the same day as the application. So be aware it can be problematic depending on the IO reviewing your application, and no doubt the immigration office you use.