Taking a step to Time Deposit Bank Account

As we grow and develop the habit of saving, putting some money in our Personal Savings bank account becomes natural. Sooner, we will notice that our account has a lot money and already surpassed the way a Personal Savings bank account should be used.

Usually, we let our excess money overstay in that type of account. As we check our passbook or statement of account, don’t be surprised if the interest your money earned on that account is very small.

Remember that Personal Savings bank account only yields very small interest rate and I treat it only as my second wallet.

If my Personal Savings bank account already surpassed its funds for maintaining its limit, my daily expenses and in case of emergency, I put the excess money in higher earning investment.

At the beginning, we really don’t know where to put this excess money to earn more. Well, don’t go anywhere yet. You can check and ask your bank if they are offering Time Deposit account.

So what exactly is this Time Deposit bank account?

Time Deposit bank account offers higher interest rate than Personal Savings account. Certificate of Deposits (CDs) are issued to time depositors and it usually yield around 3 to 4 percent interest rate.

But the thing here is that you are not allowed to touch or withdraw your deposit in a 3-month period (sometimes 4 months). When you reach the maturity date, your Certificate of Deposit expires and the bank must give you your deposited money with the interest rate they gave in your certificate.

For me, I usually use Time Deposit when I suddenly received a large amount of money and haven’t decided yet where to invest it. I will let it sit for 3 months and earn some interest while I’m researching for a better investment type. Then, I will transfer it in a higher yielding investment after thorough research.

Are there Time Deposit bank accounts that yield higher interest rate than 4 percent?

Some banks are offering Time Deposit that is locked in 5 or 6 years and offers a much higher interest rate. This is a decent investment that you may want to check.

Are you familiar with one of the principles in investment, “The Rule of 72”? If not, then you may want to read “The Rule of 72”, a principle about doubling your money. That principle is usually applied here.

Don’t forget that Bank deposit accounts are covered by PDIC (Philippine Deposits Insurance Corporation) up to Php 500,000 in case the bank is robbed. If you have more than Php 500,000, make sure to deposit it in your trusted banks.