2019 Philippine time deposit: Getting the best interest

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Looking for better interest rates than what your bank is giving you? Which banks in the Philippines offer the best time deposit?

Time deposit has become popular nowadays. It’s a safe, low risk form of passive income that you can invest and that gives your better returns on your money than a regular savings account.

What is a time deposit?

A time deposit is a type of bank account where savings are locked in for a period of time.

It offers higher interest rate than a regular savings account as you’re trading limited access to your funds with higher returns. Your money is guaranteed as it is insured by the Philippine Deposit Insurance Corporation (PDIC), up to half a million pesos of all your deposits in a specific bank that went under.

Features of the time deposit

A time deposit shares similar features with a regular bank account such as deposit and interest. It has the following common features:

  • initial deposit
  • tenor
  • interest
  • certificate of deposit.

Initial deposit, also called minimum placement, is the required amount for opening an account. This can range between P10,000 to over a million pesos.

Lock-in period, also called terms of placement or maturity or tenor, is the length of time the funds remain with the bank. You can choose between a relatively short 30-day tenor up to 10 years.

Interest rate is the return that you can expect for depositing your money. It determines how much you would gain for not using your funds over time.

Certificate of deposit is the evidence or proof that you have an active account.

Advantages of having a time deposit

As a passive income, time deposit allows you to build your wealth gradually. The following are the benefits that you get when you start a time deposit.

  • higher returns through better interest than what’s offered by the regular bank account. The interests usually vary depending on the prevailing daily market rate from Bangko Sentral ng Pilipinas.
  • flexible maturity you can choose from with 30, 60, 90, 180 days, 1 year or longer.
  • the higher the balance, the higher your potential returns can be.
  • automatic rollover so your deposit renews without any action from you.
  • relatively less risky due to PDIC coverage
  • prevents impulsive spending as your money is locked away in the bank.

This account is ideal for people who don’t like too much risk in terms of investing, are willing to save long-term, and would like to get better returns than traditional bank accounts.

Moreover, it’s perfect if you’re saving up for big purchases or expenses some time in the future such as real estate, house and lot, car, travel, leisure, pension plan, or savings accounts for your kids.

Disadvantages

Fees are charged when you pre-terminate the fund. And this is its downside, as you sacrifice flexibility of obtaining your money back in return for better yield.

Also, the interest you’re gaining may be lower compared to Pag-IBIG MP2 and other alternatives in earning passive income like UITF, mutual fund, PERA or exchange traded fund like First Metro Philippine Equity Exchange Traded Fund.

For instance, the average 1-year return of an investment in a stock index is about 7-8%. The opportunity cost of not earning higher like in an index fund for example, albeit with higher risks of volatility, may be something that others find disadvantageous especially when done within a long period of time.

For you as an investor, this balancing between potential income and risks is a decision that you have to make on your own. Still, read on to discover the best time deposit available in the market.

Updated 2019 Philippine time deposit

BankInterestMinimum DepositTerm
BPI Direct/Family Savings Bank 5.000%1 million 5 years
Security Bank4.600%100,0007 years
PSBank4.250%50,0005 years
EastWest Bank4.000%10,0005 years
PBCOM3.875%10 million12 months
Maybank Philippines3.500%50,0005 years
Rizal Commercial Banking Corporation2.625%1 million1 year
Unionbank1.750%10 million1 year
Metrobank1.125%5 million1 year
UCPB1.125%4 million90 days

Time deposit with the highest interest rates

Banks offer varying returns based on maturity and amount. What this means is that the higher your deposits and the longer your maturity are, the better interest they will give to your account.

Below is a list of the top 11 best time deposit accounts offered by banks in the Philippines with the updated and the latest interest rates ranked from highest to lowest. The rates reflected here are for at least P100K of deposit and a term of 1 year.

So let’s compare how your money will grow if you decide to put down P100K today and let it stay in a time deposit account in 10 years. We will also assume that the term is 1 year and the account automatically rolls over to the next succeeding years. These time deposit accounts are arranged from highest to lowest interest.

BankInterestAfter 1 yearAfter 10 years
Philippine Bank of Communication3.50%3,500.0041,059.88
East West Bank3.38%3,375.0039,365.48
Security Bank2.65%2,650.0029,894.13
Rizal Commercial Banking Corporation2.38%2,375.0026,455.91
Maybank Philippines 1.75%1,750.0018,944.45
PSBank1.50%1,500.0016,054.08
BPI Direct/Family Savings Bank 1.13%1,125.0011,836.96
Chinabank1.08%1,075.0011,285.22
Metrobank0.88%8759,102.69
Unionbank0.88%8759,102.69
United Coconut Planters Bank´╗┐0.75%7507,758.25

As you can see, the difference between the highest and the lowest rates is really clear. Security Bank gives P3,120 of interest on the first year alone compared to only P600 from UCPB. That’s about over 5 times the difference.

And in 10 years time, the difference is even larger. Security Bank returns P35,965.60 of interest to your account, while UCPB with the lowest interest only pays out P6,164.62. Which is P29,800.98 difference between the two. It’s clear that it really pays to check which investment option to put our hard-earned money into.

Below is a summary as well as the links that will lead you to the discussion for each account. You will also see projection of what happens to your money after 10 years.

Philippine Bank of Communication

With 3.50% interest, the Philippine Bank of Communication (PBCOM) comes next in our list. It also has a low initial deposit of P1,000 already earning 1.750%. Just like other similar products, the return is tiered and increases on the lock-in period and the amount of deposit.

Interest: 3.50% for placement of P100,000
Minimum initial deposit: P1,000
Tenor: 30, 60, 90, 120, 180 to 360 days.

Philippine Bank of Communication (PBCOM) comes second in highest interest time deposit.

There are currently two variants. One is a regular type where you’d be given a certificate of time deposit as proof of ownership. The other one would give you a passbook.

Below is a projection of your P100,000 saved one time, or when you consistently save each year for the next 10 years.

The fun part is to track the growth of your savings for 10 years. The table below shows your total deposit and balance with earned interest. This and succeeding projections assumes the following:

  • The interest on renewal remains the same, which is credited once at maturity.
  • The term is one year.
  • One-time means putting a deposit of P100,000 just once on the first year.
  • Annual means you’re saving P100,000 each time the account renews every year.
  • The first balance includes interest earned when you only save once, while the second balance is when you annually save P100,000.
  • Calculations do not include tax on interest earned.
YearOne-timeBalanceAnnualBalance
1100,000102,800.00100,000102,800.00
2105,678.40200,000208,478.40
3108,637.40300,000317,115.80
4111,679.24400,000428,795.04
5114,806.26500,000543,601.30
6118,020.84600,000661,622.13
7121,325.42700,000782,947.55
8124,722.53800,000907,670.09
9128,214.76900,0001,035,884.85
10131,804.781,000,0001,167,689.62

EastWest Bank

The Peso Time Deposit of EastWest Bank comes in third. The 3.375% rate it provides is competitive in the market, allowing you to have less worries than other investment products. You’re also given flexibility on the term which range from as short as 30 days to 5 years.

Interest: 3.375% for placement of P100,000
Minimum initial deposit: P10,000
Tenor: 30, 60, 90, 180, 360 days, up to 5 years

EastWest Bank Peso Time Deposit.

The bank issues a certificate as evidence of the time deposit. Moreover, you can fill out a form online to enroll. After you receive an email confirmation, you may present additional documents for account opening at the branch nearest you.

If you choose to open at EastWest, below is a forecast of your savings for the next 10 years whether you put down or consistently save P100,000 annually.

YearOne-timeBalanceAnnualBalance
1100,000102,700.00100,000102,700.00
2105,472.90200,000208,172.90
3108,320.67300,000316,493.57
4111,245.33400,000427,738.89
5114,248.95500,000541,987.84
6117,333.67600,000659,321.52
7120,501.68700,000779,823.20
8123,755.23800,000903,578.42
9127,096.62900,0001,030,675.04
10130,528.231,000,0001,161,203.27

Security Bank

The Peso Time Deposit of Security Bank tops the list with an interest rate of 3.90% for P100,000 deposit. It’s an account for those who would want to get the best rate available in the market. It is also for those willing to save long-term but doesn’t want to take too much risk when investing.

Interest: 3.90% for a minimum placement of P100,000
Minimum initial deposit: P100,000

Terms: 30, 60, 90, 180, 360 days, 2-5 years and 7 years

Security Bank Peso Time Deposit tops the list with the highest interest rate.
Security Bank Peso Time Deposit tops the list with the highest interest.

What’s more, accounts with at least a term of 5 years would be exempted from paying taxes.

YearOne-timeBalanceAnnualBalance
1100,000102,650100,000102,650
2105,370200,000208,020
3108,163300,000316,183
4111,029400,000427,212
5113,971500,000541,183
6116,991600,000658,174
7120,092700,000778,266
8123,274800,000901,540
9126,541900,0001,028,081
10129,8941,000,0001,157,975

Rizal Commercial Banking Corporation

The Rizal Commercial Banking Corporation (RCBC) offers 2.375% on time deposit of P100,000. That rate then goes up to 2.50% when the account increases to half a million pesos. It’s like the bank encourages you to save more and rewards your patience. This makes it a risk-free choice for investment that gives better returns the longer you wait and the more that you save.

Interest: 2.375% for placement of P100,000
Minimum initial deposit: P5,000
Tenor: 30, 60, 90, 180, 360 days, up to 5 years

RCBC Peso Time Deposit

Another good thing about the RCBC Peso Time Deposit is that its minimum deposit is P5,000 that already earns 1.625%. Should you close it before maturity though, you will pay the documentary stamp tax.

If you choose to invest, the following contains a projection of your one-time as well as annual savings of P100,000 for the next 10 years. We have also included the rate increase to 2.50% when the deposit reaches P500,000.

YearOne-timeBalanceAnnualBalance
1100,000101,900.00100,000101,900.00
2103,836.10200,000205,736.10
3105,808.99300,000311,545.09
4107,819.36400,000419,364.44
5109,867.92500,000529,751.73
6111,955.41600,000642,346.77
7114,082.57700,000757,193.70
8116,250.14800,000874,337.58
9118,458.89900,000993,824.33
10120,709.611,000,0001,115,700.81

Maybank Philippines

Maybank Philippines offers the ADDvantage Flex Time Deposit in 1 year and 2 year tenors. It comes with tiered rates of 1.75% for the 1-year term, and 2.125% for the 2-year term. The interest is transferred to a savings or client’s existing checking account.

Interest: 1.75% for placement of P50,000
Minimum initial deposit: P50,000
Tenor: 1 year and 2 years

Maybank ADDvantage Flex Time Deposit.

Similar to other products, it has a withholding tax of 20% on any interests earned. The documentary stamp tax is waived too, except when the client decides to close the account before maturity.

We’re going to project your earnings for 10 years should you open a Maybank ADDvantage Flex Time Deposit. Again, the forecast would include the one-time and annual savings of P100K. Check the projection in the table below.

YearOne-timeBalanceAnnualBalance
1100,000101,400.00100,000101,400.00
2102,819.60200,000204,219.60
3104,259.07300,000308,478.67
4105,718.70400,000414,197.38
5107,198.76500,000521,396.14
6108,699.55600,000630,095.69
7110,221.34700,000740,317.02
8111,764.44800,000852,081.46
9113,329.14900,000965,410.60
10114,915.751,000,0001,080,326.35

PSBank

PSBank offers Peso Time Deposit to their customers with interest at 1.50% per year for a placement of P100K, which makes it part of the top products in this category. To top that, the rate increases to 1.750% when deposit reaches half a million pesos. The bank keeps rewarding you as the account grows: 2.75% at 1M, 3% at 5M, and 3.5% at 10M and above.

Interest: 1.50% for placement of P50,000
Minimum initial deposit: P10,000
Tenor: 30, 60, 90, 1 year to 3 years

PSBank Peso Time Deposit.

In addition, the account can be started with as little as P10,000 and for as short as 30 days. The bank would notify you on maturity or you have the option to set an automatic rollover of placement. There’s also an online and mobile banking system that you can use to manage your account.

Now, let’s track the how much your money would be when you save P100K either once or annually for a decade. Below, we also reflect the increase on rate when the deposit reaches P500K.

YearOne-timeBalanceAnnualBalance
1100,000101,200.00100,000101,200.00
2102,414.40200,000203,614.40
3103,643.37300,000307,257.77
4104,887.09400,000412,144.87
5106,145.74500,000519,314.89
6107,419.49600,000620,714.89
7108,708.52700,000730,804.90
8110,013.02800,000842,436.17
9111,333.18900,000 955,630.28
10112,669.181,000,0001,070,409.10

BPI Direct/Family Savings Bank

Both Family Savings and BPI Direct Savings banks of Bank of the Philippines Islands (BPI) offer two products: the Peso Auto Renew Time Deposit and the Peso Express Time Deposit. Both have a competitive rate of 1.125% for a deposit of P50,000 and a term of one year. The Peso Auto Renew Time deposit renews the placement for a fixed yield automatically, while the Peso Express Time Deposit is ideal for short-term saving as the term starts 30 days and longer.

Interest: 1.125% for placement of P50,000
Minimum initial deposit: P50,000
Tenor: 35, 63, 91, 182, and 364 days

BPI Direct/Family Savings Banks’ Peso Auto Renew Time Deposit and Peso Express Time Deposit.

Like other time deposit accounts, the interest is higher than regular savings with no risks on principal.

And since both accounts actually have the same characteristics, then we can create a projection that applies to both of them. Here’s how the money would look like in 10 years for one-time and annual savings of P100K.

YearOne-timeBalanceAnnualBalance
1100,000100,900.00100,000100,900.00
2101,808.10200,000202,708.10
3102,724.37300,000305,432.47
4103,648.89400,000409,081.37
5104,581.73500,000513,663.10
6105,522.97600,000619,186.07
7106,472.67700,000725,658.74
8107,430.93800,000833,089.67
9108,397.81900,000941,487.48
10109,373.391,000,0001,050,860.86

China Bank

If you have a China Bank Regular Time Deposit Account, your deposit of P5,000 can earn 0.950% when held for a year. That’s how easy and affordable it is to open account. And for the sake of our comparison, their one-year term of a P100,000 deposit earns a competitive 1.075%.

Interest: 1.075% for placement of P100,000
Minimum initial deposit: P5,000
Tenor: 90, 180, 360 days

China Bank Time Deposit

And that’s not all. If the deposit reaches P300K, the rate increases to 1.20%. If it reaches half a million, the rate increases 1.325% and for one million, 1.825%. Now, if that doesn’t encourage anyone to save, we don’t know what will. Also, a certificate of deposit is issued once placement is made. There is also an option to automatically roll the deposit over upon maturity.

For our projection, we’re going to take into account these tiered rates once certain amount is reached. In the next 10 years, this is how the growth of your money would look like.

YearOne-timeBalanceAnnualBalance
1100,000101,060.00100,000100,860.00
2102,131.24200,000202,587.40
3103,213.83300,000305,796.95
4104,307.89400,000409,692.60
5105,413.56500,000514,585.65
6106,530.94600,000621,615.36
7107,660.17700,000729,264.48
8108,801.37800,000838,054.68
9109,954.66900,000947,998.06
10111,120.181,000,0001,078,334.46

Metrobank

Slowly prepare your future and build your savings through Metrobank Time Deposit. Starting rate is 0.875% for a placement of P100K, which then increases to 1% on P1 million. You can lock in for a fixed term as short as 30 days (bigger deposits can still earn for terms less than a month).

Interest: 0.875% for placement of P50,000
Minimum initial deposit: P10,000
Tenor: 30, 2-3 months, 180 days, 1 year

Metrobank Time Deposit interest rates.

As a safe, low risk savings vehicle, the account can provide interest that are superior to basic bank account. Additionally, you may have the option to automatically roll over your deposit upon maturity so you don’t have to do anything to keep saving for the long-term.

When coming up with a projection for Metrobank time deposit, we made sure that we take into account the increase in rate when the deposit hits 1 million. Also, the table illustrates the savings when only P100K was deposited and when you’ve saved P100K consistently each year for the next 10 years.

YearOne-timeBalanceAnnualBalance
1100,000100,700.00100,000.00100,700.00
2101,404.90200,000.00202,104.90
3102,114.73300,000.00304,219.63
4102,829.54400,000.00407,049.17
5103,549.34500,000.00510,598.52
6104,274.19600,000.00614,872.71
7105,004.11700,000.00719,876.81
8105,739.14800,000.00825,615.95
9106,479.31900,000.00932,095.26
10107,224.671,000,000.001,040,352.03

Unionbank

Unionbank’s Time Deposit account rewards you as you let your savings grow. It gives even bigger rewards when you save more. Its base rate of 0.875% for a placement of at least P50,000 is already competitive. The interest goes up to 1% on P300,000 and then to 1.3% on 1 million pesos.

Interest: 0.875% for placement of at least P50,000
Minimum initial deposit: P50,000
Tenor: 30, 60, 90, 180, 1 year and above

Unionbank time deposit account.

On top of that, the bank issues a certificate of time deposit upon opening the account and the interest payment is made at the end of the term.

At this point, let’s create a forecast of your savings. Just like all of our examples, we’re going to see how much your balance would be if you save just once or save P100K annually for 10 years. We’re also going to reflect the changes in rate when the account balance reaches a certain level.

YearOne-timeBalanceAnnualBalance
1100,000100,700.00100,000.00100,700.00
2101,404.90200,000.00202,104.90
3102,114.73300,000.00304,521.74
4102,829.54400,000.00407,757.91
5103,549.34500,000.00511,819.98
6104,274.19600,000.00616,714.54
7105,004.11700,000.00722,448.25
8105,739.14800,000.00829,027.84
9106,479.31900,000.00936,460.06
10107,224.671,000,000.001,044,751.74

United Coconut Planters Bank

The United Coconut Planters Bank (UCPB) Time Deposit has a tiered interest rate depending on the amount of deposit. Its minimum required placement is P10,000. By the time the deposit reaches half a million pesos, the rate goes up to 0.875%. This is subject to change on the discretion of the bank.

Interest: 0.075% for placement of P100,000
Minimum initial deposit: P10,000
Tenor: 90, 180, 360 days

United Coconut Planters Bank Time Deposit

The account comes in short-term variants: 30 to 90 days terms. This is suitable for people to park their money for a very short time while enjoying relatively higher return than a traditional bank account.

In the projection, we’re going to start off with the base rate. And then by the time the deposit reaches half a million, we’re going to switch the rate to 0.875%. Check the table below.

YearOne-timeBalanceAnnualBalance
1100,000100,600.00100,000100,600.00
2101,203.60200,000201,803.60
3101,810.82300,000303,614.42
4102,421.69400,000406,036.11
5103,036.22500,000510,598.52
6103,654.43600,000614,872.71
7104,276.36700,000719,876.81
8104,902.02800,000825,615.95
9105,531.43900,000932,095.26
10106,164.621,000,0001,039,319.93

What to look for in a time deposit

Now that you’ve seen the the interest rates offered in the market, it’s time to know what makes a good time deposit. While in the end it all boils down to your choice, here are some of the factors that you can keep in mind.

  • Reputable banks. Deal only with banks that have proven reputation in the industry. Bear in mind that the rates banks with long history may offer lower rates compared to banks that are just starting up, which offer attractive returns to appeal to more people.
  • Maximize your earnings. The time deposit that you choose must be something that can give you the most returns.
  • Easy. While having a interest rate is great, it’s important to consider ease of managing it as well. There’s actually no reason to have great returns if it’s too much of a hassle to manage.
  • Convenient. The bank that deals with your time deposit should ideally be able to make the processes convenient for you. Do they have an online account? How do you receive your earnings? Are they going to keep you updated?
  • Fast turnaround. Check the turnaround time when processing withdrawal. This is crucial especially when you’re in an emergency and need the money quickly. You can’t afford to wait around for the deposit to be released.

How to get started with time deposit

To open a time deposit account, you need the following:

  • Research. Look around. Reading and choosing the interest rates as discussed above is a start. However, you may have other requirements and needs that are particular to you.
  • Pick a bank. Choosing the bank is really crucial because you would want to be with an establishment that has a great credibility. Having great returns with a bank that you can’t trust isn’t really worth taking.
  • Choose the product. After you’ve chosen the bank, then select the time deposit products that they offer. Look for factors such as rate, term, and initial deposit.
  • Prepare the requirements. Check the requirements by visiting their website, asking for brochures, or dropping by their office. By ensuring that you got everything required ahead of time, you’d have a hassle-free experience.
  • Open the account. Bring the required papers such as identification cards, proof of billing and the initial deposit when you open the account.
  • Track. When you are given the certificate of deposit, check if there is a way for you to be updated about the account. Is there an online access? Will a mail be sent to your address?

How to get the most out of your time deposit accounts

Because time deposits would require time to grow, one of the most challenging part would be learning how to wait. This part of the article is going to deal with financial planning tips on how you can make most out of it. That is, how to master time and avoid the urge to prematurely terminate your account.

Emergency fund. Take stock of your emergency funds. Before you even start investing or setting aside for time deposit, you should have ample money that you can access when you’re in an emergency situation.

Be patient. Learn the virtue of waiting. Take your mind off of your money. It is actually hard enough to do this at first. In time, you’d learn to disregard that little voice in your head that tells you to withdraw before the term ends.

Take on multiple income stream. Get a part-time job, open a side business, or just do any income-generating hustle. By opening new streams of income, you’re less likely to be tempted dipping into your savings.

Stick to your goal. Avoid the urge to withdraw just at any time you like. This takes a bit of self-discipline, and it’s the trickiest to have mastery over. What you can do is focus on long-term financial goals that you earmarked the time deposit for. It is going to prevent you from being tempted to act on an impulse.