The concept of Time Deposits as a savings/investment instruments is perhaps as old as the concept of banking itself. The popularity and appeal of this savings instrument continues till date and will remain as a popular choice of investment for the conventional as well as the new age investor.
What is Time Deposit?
A Time Deposit is a savings instrument that locks a certain amount of money for a fixed term with pre agreed terms and conditions laid out by the bank. Upon maturity(end of term), the depositor receives the principal amount with interest charges computed at a fixed rate. Depending on the plan chosen, the depositor is also eligible to receive monthly or periodic interest charges into the bank account. Also known as Term Deposit, the interest earning potential in this instrument is higher than returns disbursed by parking money in a savings(deposit) account.
Time Deposit Rates
|Bank||Product Name||Minimum Initial Placement||Term||Interest Rates|
|Peso Time Deposit||Php 1,000.00||30,60,90,180 and 360 Days||Click Here|
|Dollar Time Deposit||USD 1,000.00||30,60,90,180 and 360 Days|
|Dollar PRA Time Deposit||As advised by PRA||30,60,90,180 and 360 Days|
|Two Year Dollar Time Deposit||USD 50,000.00||2 Years|
|Three Year Dollar Time Deposit||USD 50,000.00||3 Years|
|Five Year Dollar Time Deposit||USD 50,000.00||5 Years|
|BPI Regular Time Deposit||Php 1,000.00||35,63,91,182 and 364 Days||Click Here|
|BPI Family Savings Bank Time Deposit||Php 1,000.00||35,63,91,182 and 364 Days|
|BPI Direct Savings Bank Time Deposit||Php 1,000.00||35,63,91,182 and 364 Days|
|US Dollar Time Deposit Rates||Php 1,000.00||35,63,91,182 and 364 Days|
|Regular Time Deposit||Php 5,000.00||3 and 6 Months||Click Here|
|Diamond Savings Account||Php 50,000.00||1,2,3 and 6 Months|
|MONEYLIFT - Quarterly||Php 50,000.00||Quarterly|
|US Dollar Time Deposit||USD 1,000.00||1,2,3,6 and 12 Months|
|Euro Time Deposit||Euro 1,500.00||1,2 and 3 Months|
|Peso Time Deposit||Php 1,000.00||1,2,3,6 and 12 Months||Click Here|
|US Dollar Time Deposit||USD 1,000.00||1,2,3,6 and 12 Months|
|DOLLAR INNOVATE 5-YEAR TIME DEPOSIT||USD 10,000.00||5 Years|
|Peso Time Deposit||Php 1,000.00||Minimum of 30 days and Maximum of 360 days||Click Here|
|Dollar Time Deposit||USD 1,000.00||Minimum of 30 days and Maximum of 360 days|
|Classic Time Deposit||Php 25,000.00||Minimum of 31 Days and Maximum of 359 Days||Click Here|
|ADDvantage Flex Time Deposit||Php 50,000.00||1 and 2 Years|
|ADDvantage Advance Time Deposit||Php 50,000.00||1 Year|
|ADDvantage 5-Year Time Deposit||Php 50,000.00||5 years plus 1 day|
|Flexi Rate Deposit||Php 50,000.00||Minimum of 31 Days and Maximum of 359 Days|
|Peso Regular Time Deposit||Php 10,000.00||30, 60, 90, 180, and 360 Days||Click Here|
|US Dollar Time Deposit||USD 1,000.00||30, 60, 90, 180, and 360 Days|
|Peso Time Deposit||Php 5,000.00||30, 60, 90, 180, and 360 Days||Click Here|
|Dollar Time Deposit||USD 1,000.00||30, 60, 90, 180, and 360 Days|
|Prima Time Deposit Rates||Php 1,000.00||1,2,3,6 and 12 Months||Click Here|
|Prima Dollar Time Deposit Rates||USD 1,000.00||1,2,3,6 and 12 Months|
|Maxima 5 Long Term Deposits||P25,000.00||5 years and 1 day|
Why to invest in Time Deposit?
The benefits of investing in Time Deposits are many and risk free since the principal and fixed returns are guaranteed at the end of term. Let us look at the various benefits of parking your hard earned money in these instruments.
Since Time Deposits are not directly linked to market funds, it assures definite returns during or at the end of the term. The interest charges are definite and do not come with any strings attached. The interest value may not be phenomenal, but pleasing enough to consider this option anytime you have surplus funds. Based on the term and offers from the bank, you can earn interest charges at the rate of 1 to 5 percent.
Helps in Mobilizing Savings
A one of its kind savings instrument in the market that probably finds no match, Term Deposits helps in planning key events in life at ease. It also fulfills your savings goals, both short and long term. If you’re looking for a sure shot returns deposit plan, invest in this deposit option and look forward to earning interest charges along with the principal amount.
Keeps Your Money Safe
Unlike other market linked investment plans where the money is exposed the market turmoil, which will have a definite impact on the principal amount, a Term Deposit keeps your money secured it is not linked to the performance of a market linked fund. This way, you can invest, relax and be assured of full returns upon maturity.
Flexibility to Choose and Modify Terms
Be your own investment guru by exercising freedom to select and alter basic terms such as the term of deposit, frequency of interest disbursal’s etc. As a well informed depositor, you can asses your periodical requirements and choose terms that suit you the most.
Best Apparatus for Planning Financial Goals
Major and minor events in life require financial stimulus. Key events such as marriage, child’s education, house purchase are largely answered by monetary resources. However, mere savings in bank may not fulfill the need. Therefore, if you received a bonus or have surplus monies parked in bank, invest them in Time Deposits so that your hard earned money is locked for a certain period. Careful planning will ensure that you invest the right amount, redeemable when the event occurs.
Acts as Collateral For Loans
Monies held in Time Deposit instruments can be pledged as collateral when you borrow loans such as car or home. It secures your loan in a longer run and ensures that you never run out of collateral options when needed.
Types of Time Deposits in Philippines
Currency Based Options
In Philippines, most of the banks and financial institutions let you deposit in leading currencies that includes US Dollars apart from Peso. The flexibility to choose a currency of your choice also ensures optimised returns if it the currency is valued high.
Based on Terms of Placement
Short term deposit options generally start at 30 days to 1 year(lock in period) whilst long term deposit options starts from above 5 years and can go up to 6 years. Longer the term, higher the benefits.
Tax Saving Time Deposits
Based on the term, some of the Time Deposit options extend tax benefits, provided you do not make premature withdrawals before the maturity.
Features of Time Deposit
Basic Documentation: Unlike other investment instruments that requires heaps of documents and paperwork, a time deposit mostly requires only a form and can be opened in the hassle free manner in little time.
Freedom to Invest as much as you want: Basic Time Deposit insurance plans do not come with any cap of how much you can invest. Therefore, you have greater freedom to choose an amount of your choice without any restrictions as your budget permits.
Appeals to all Classes of Investors: An instrument highly regarded by a rookie as well as an expert investment advisor, Time Deposit is a humble product that is accepted by all types of investors due to optimal and assured interest earning feature. Compared to other products of similar functioning, Term Deposits are immensely popular with the masses.
Easy-To-Understand Terms & Conditions: Comes with no strings attached. The terms and conditions can be easily comprehended even by a beginner who has minimal knowledge about the banking segment and its deposit options.
Eligibility Criteria to Open Time Deposit
A legal citizen of Philippines with an active bank account is eligible to apply and run a Term Deposit account. When it comes to eligibility, not many conditions are set by banks since it is a simple product that is accessible to all.
Time Deposit Requirements
- A savings bank account for transacting
- Govt. issued documents for identity and address proof
- Any other paperwork, depending on the bank’s requirement
FAQs for Time Deposit
- I have a couple of Time Deposit accounts that I wish to close before the maturity. Is this possible?
Most of the banks allow premature withdrawals that comes with a certain monetary penalty calculated on the outstanding balance. Please check with the bank for further information.
- What is the maximum tenure one can avail for securing a Time Deposit?
Completely depends on what the bank has to offer. From what we know, terms for Time Deposits can stretch up to 5 to 6 years.
- Is there a processing fee charged by the bank when I approach them for opening a Time Deposit account?
No fee or charges are applicable for opening Time Deposit accounts as long as the deposit amount is within the limits.
- Are there any plans in Time Deposits which pay interest on a monthly basis?
Yes, there are options where you can receive interest charges on a monthly or quarterly basis depending on the product offering. You can read more about products offered by exploring the banks under the Time Deposits section of this website.
- Can Time Deposits be used for tax exemption?
Yes, you can. Some long term deposit options give you the benefits of tax exemption at the time of declaration.
News About Time Deposit in Philippines
BSP to Offer P30 Billion at Term Deposits Maiden Auction
Philippine central bank has decided to offer $641.64 million (P30 billion) at the term deposits maiden auction, which will be held on 8th June, 2016. The Term Deposit Auction Facility (TDF) is provided to emphasize the importance of the overnight borrowing rate. The central bank plans to introduce a rate corridor system that will make way for effective policy transmission. The TDF is a component of this system. Through this system, 7 days and 28 term deposits will be offered. Depending on the liquidity, longer tenure of deposits may be offered in the future.
27th May 2016