Choosing and Investing in the Best Time Deposit in the Philippines
Time deposit is a popular investment option among Filipinos as it offers a guaranteed return on investment and is a safe way to keep away your money for a specific time period.
Most banks in the Philippines offer time deposit accounts. Anyone can open a time deposit as long as they have enough money to cover the initial opening deposit for the term of the account they are targeting.
Before you jump into opening a time deposit account, you may want consider your options according to these pointers below:
The term of your investment in time deposit accounts affects how much interest you earn. There are basically two types of investment terms in this type of account – long term and short term.
- Short Term Investment – Investment term for a fixed period of 3, 6, or 9 months are short term time deposits. This is applicable for anyone who would like to earn from their savings while still want to be able to have access to their funds sometime in the immediate future.
- Long Term Investment – Investment terms of more than 12 months mean these time deposits are long term investments. For this type of investment interest rates are higher and with longer lock in period typically 1, 2, 3 or 5 years. Like with other bank accounts, a minimum deposit amount is required. The longer the investment term, the higher the interest earned.
Charges and Fees
Philippine banks do charge pre-termination fees or penalty fees for terminating your time deposit contract prior to maturity, so make sure that you choose the investment term you would like to have on your time deposit wisely. Make sure you read the fine print to ensure that fully understand the terms and conditions of the term you opt for
The interest rate matters most when you are looking at time deposit investments. For the same maturity term, the higher interest rate offered, the better. Banks sometimes complicate matters by including promotional rates with conditions attached (of course!). Check if these promotions are applicable for you, and suit your current situation before diving in.