Are you looking to grow your money easily and safely? If you don’t want to bet your money to the unpredictable stock market or keep it in a traditional savings account with a low-interest rate, then you should consider a time deposit.

How time deposits work

Time deposit accounts lock your money in the bank for a certain lock-in period, sometimes called tenor, maturity, or terms of placement. During this time, you’re not allowed to withdraw any part of your initial deposit. You can choose to lock your money from 30 days up to 1 year or even more. Pre-terminating your deposit has corresponding fees or penalties. Time deposits have a high demand for discipline when it comes to spending and untimely withdrawals.

Upon reaching the end of your lock-in period, you can choose to (1) automatically rollover your deposit and the acquired income for the same lock-in period, (2) withdraw your income and rollover your initial deposit, or (3) withdraw everything from the account if you’re satisfied with the return.

A minimum initial deposit or a minimum placement is required to open your account. This can range from PHP 1,000 to  PHP 100,000, depending on your choice of bank. Usually, higher balance yields higher potential returns from higher interest rates. All-time deposit accounts in the country are insured by the Philippine Deposit Insurance Corporation (PDIC) up to PHP 500,000 in case your money is compromised by your bank.

 

time deposit

Time deposit interest rates

Time deposit accounts offer a higher interest rate than a savings account and lower risk than active investment elsewhere. This is ideal for people saving up for an expensive vacation, real estate, or other big purchases in the future.

Banks offer the flexibility of your funds with variable lock-in periods and account balance. Higher deposits and longer maturity are offered higher interest rates. We have listed the top 5-time deposit accounts in the Philippines as of June 24, 2019.

The least comparable amount for the following banks is PHP 100,000 whose row is highlighted in green. The advertised interest rates are still subject to 20% withholding tax.

 

  1. Security Bank Peso Time Deposit
  2. EastWest Peso Time Deposit
  3. Philippine Bank of Commerce (PBCOM) Peso Time Deposit
  4. Rizal Commercial Banking Corporation (RCBC) Peso Time Deposit
  5. Maybank ADDvantage Flex Time Deposit
     

Best banks for a time deposit account

Security Bank Peso Time Deposit

Security Bank allows a lock-in period up to 7 years. They offer an all-time high-interest rate at 5% when you deposit at least PHP 100,000 for 5 years!!!

Minimum deposit (PHP)

1 mo.

2 mos.

3 mos.

6 mos.

1 yr.

2 yrs.

3 yrs.

4 yrs.

5 yrs. *

7 yrs.

100,000

3.500%

3.600%

3.600%

3.700%

3.900%

4.100%

4.200%

4.400%

5.000%

4.700%

1,000,000

3.700%

3.800%

3.900%

4.000%

4.100%

4.300%

4.400%

4.600%

 

 

*for individual clients only

EastWest Peso Time Deposit

Despite having a tie with Security Bank’s interest for 1-year lock-in of PHP 100,000, you can invest your money in EastWest for as low as PHP 10,000. Their balance amounts are far more flexible than other banks.

Minimum deposit (PHP)

1 mo.

2 mos.

3 mos.

6 mos.

1 yr.

2 yrs.

3 yrs.

4 yrs.

5 yrs.

10,000

2.375%

2.500%

2.625%

2.625%

2.625%

3.625%

3.750%

3.875%

4.000%

100,000

3.500%

3.600%

3.700%

3.800%

3.900%

 

 

 

4.638%

500,000

3.600%

3.700%

3.800%

3.900%

4.000%

 

 

 

 

1,000,000

3.800%

3.900%

4.000%

4.100%

4.200%

 

 

 

 

10,000,000

3.875%

4.00%

4.125%

4.125%

4.200%

 

 

 

 

*displayed rates are from a recent promo. No updated rates are currently in the bank’s official website.

Philippine Bank of Commerce (PBCOM) Peso Time Deposit

You can open a time-deposit account in PBCOM for at least PHP 1,000! Given this, their interest rates are still higher than most savings accounts where you have to invest larger sums.

Minimum deposit (PHP)

1 month

2 months

3-4 months

6 months

1 year

1,000

1.250%

1.250%

1.250%

1.250%

1.750%

100,000

2.500%

2.500%

3.000%

3.375%

3.500%

500,000

3.000%

3.000%

3.000%

3.375%

3.500%

1,000,000

3.250%

3.250%

3.375%

3.625%

3.875%

 

Rizal Commercial Banking Corporation (RCBC) Peso Time Deposit

You’ll notice the >1% gap in the interest rate from PBCOM to RCBC. However, RCBC’s balance amounts are more flexible if you want to increase your possible return.

Minimum deposit (PHP)

1 mo.

1.5 mos.

2 mos.

3 mos.

6 mos.

1 yr.

5,000

0.500%

0.625%

0.750%

0.875%

0.875%

1.625%

10,000

0.625%

0.750%

0.875%

1.000%

1.125%

1.750%

40,000

1.500%

1.500%

1.625%

1.750%

2.000%

2.375%

500,000

1.750%

1.875%

2.000%

2.125%

2.250%

2.500%

1,000,000

1.875%

2.000%

2.125%

2.250%

2.500%

2.625%

5,000,000

2.125%

2.125%

2.250%

2.375%

2.500%

2.625%

10,000,000

2.125%

2.250%

2.375%

2.375%

2.500%

2.625%

Maybank ADDvantage Flex Time Deposit

Maybank offers the least flexible balance and maturity in our list, but its return for PHP 50,000 is still a lot more than other banks offer.

Minimum deposit (PHP)

1 yr.

2 yrs.

50,000

1.750%

2.125%

 

Now, let’s say you invest PHP 100,000 into these 5 banks with 1-year maturity. Suppose you rollover your placement every succeeding year for 10 years. Can you imagine how much your return will be? Including the 20% withholding tax for your interests, the table below should give you a picture of just how much time deposit accounts can earn you!

Bank

Interest rate
(PHP 100,000 for 1 year)

Interest (PHP)

After 1 year

After 10 years

Security Bank

3.900%

3,120.00

35,966.60

EastWest

3.900%

3,120.00

35,966.60

PBCOM

3.500%

2,800.00

35,495.31

RCBC

2.375%

1,900.00

20,709.61

Maybank

1.750%

1,400.00

14,915.75

 

You can compute for the interest by the formula: Current balance X Interest rate (in decimal) X 0.8 (tax deduction).

The interest rate depends on your chosen maturity and existing balance for your funds. The balance updates every time you decide to roll over your principal deposit and your interest onto another lock-in period. You can add more funds to your account to increase the interest rate, as well.

If you’re worried that you might need a large sum of money for a future emergency, then maybe a one-year lock-in is too long for you. The flexibility of time deposit accounts allows you to be more strategic in your investment. You can always opt for short-term maturity, and actually earn a lot more than long-term yields if (1) you just want the assurance that you can withdraw your money monthly, whether or not the fund is heavily needed, and (2) you rollover your principal deposit and interest every month.

 

time deposit

 

 

time deposit

 

If you still think that time deposits may not be right for you, there are other methods for passive income in the Philippines. Investing in the stock market and mutual funds come with high risks, but correspondingly high returns. If you’re patient to grow money gradually but with larger interests, you may want to consider investing in the Modified Pag-ibig II (MP2) Savings Program . It allows you to lock-in as low as PHP 500 monthly for 5 years with an average interest rate of 6.96%, and no withholding tax! Be smart and cautious when it comes to investing a large sum of money for long periods of time.

GoBear team

GoBear team

GoBear Team - Our content creators collaborate to come up with finance articles that will make financial literacy a joy to learn and financial security an attainable goal.

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