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, also called term 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, also called minimum placement, is the required amount for opening an account. This can range between P10,000 to over a million pesos.
  • Tenor, also called term or maturity, 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 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. It is usually expressed in percentage for the whole year and credited to the account quarterly.
  • 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
  • encourages long-term saving
  • some time deposit products waive tax on multi-year tenors

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.

But perhaps the biggest advantage of time deposit is that it’s very flexible in terms of starting capital. You can actually start for as low as 1,000 pesos. The higher capital that you put up, usually the banks would give you better interest so you can enjoy better returns over time.

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.

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.

What are the different time deposit rates?

You might discover in succeeding sections that the rates of time deposit account would matter with how much you can receive at the end of the day. The higher they are, the better.

There are two types of rates that you get from the products available in the market.

  • Fixed rate
  • Floating rate

Fixed rate

A fixed rate means that when the account is opened and the term is determined, the interest is established and will remain so for the duration of the term. That means it will never change until the account matures. This protects the investor from the changing financial environment where interest rates may dip low.

However, it also means that investors may not be able to enjoy in instances when the rates are higher.

It may be suitable for people who generally wouldn’t like to be exposed to volatility. They like to have a pre-determined amount of return. This can be ideal for those who have already a financial goal with certain amount in mind.

Floating rate

A floating rate on the other hand means that the interest that you get is subject to change. Such change is generally referred to as repricing. The repricing may take place based on what is agreed during the opening the account. It can occur as often as monthly, quarterly, etc.

Obviously, the one benefit is that it allows investors to be able to enjoy in times when interest is high. Likewise, the disadvantage is that it does not shield the investors when the interest goes down lower than what is pre-determined during account opening.

It can be good for people who wouldn’t mind some level of risks for as long as they’re able to reap higher rates when interest would go up.

Best Philippine time deposit in 2021

These are the latest interest rates per annum of the top Philippine time deposit products. They are ranked from highest to lowest. There is a link to each of the bank’s website if you want to learn more.

This is updated as of December 22, 2020. All rates that you see here are subject to change without prior notice. Reach out to the bank for the latest rate.

BankInterestBalance to earn stated interestTerm
Tonik Time Deposit6.00%5,0006 months
City Savings Bank Fixed Rate Time Deposit3.50%10 million5 years + 1 day
Sterling Bank of Asia Maxima 5 Long Term Deposits2.375%5 million5 years
PBCOM Sure Earner2.25%50,0005 years + 1 day
RCBC PHP Time Deposit2.125%100,0005 years + 1 day
CTBC Bank Peso Time Deposit2.125%10 million3 years
Robinsons Bank Peso Time Deposit2.00%5 million5 years + 1 day
PSBank 5-Year Time Deposit2.00%50,0005 years
East West Bank Peso Time Deposit1.8613%100,0005 years
Security Bank Peso Time Deposit1.82%5 million4 years
BPI Direct Savings Bank Plan Ahead1.75%1 million5 years
Maybank Flexi Rate1.75%5 million91 days
Maybank ADDvantage Time Advance Time Deposit1.75%50,0001 year
China Bank Regular Time Deposit1.45%5 million360 days
Metrobank Online Time Deposit1.25%5 million6 months

How much can you earn from time deposit?

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.

Yet there is one thing that you need to know about time deposit products in the Philippines. Rates are subject to change without prior notice, and they do this very frequently. So it’s tricky to actually estimate how you’re going to earn when you’re investing

That’s why for this estimate, I’m going to use P10 million initial capital. As you can see from the above table, this is the maximum investment to get the most return. But you can ask or visit the website of each company or drop by the bank for their latest starting capital.

The table below shows how much you can earn from time deposits in the Philippines after 1 year, 5 years, or 10 years by a range of interest rates from 0.5% to 6%. The figures that you see already reflect the witholding tax of 20%.

Interest1 year5 years10 years
6.00%480,000 2,641,727 5,981,327
5.50%440,000 2,402,307 5,381,723
5.00%400,000 2,166,529 4,802,443
4.50%360,000 1,934,350 4,242,871
4.00%320,000 1,705,730 3,702,410
3.50%280,000 1,480,626 3,180,478
3.00%240,000 1,258,999 2,676,506
2.50%200,000 1,040,808 2,189,944
2.00%160,000 826,013 1,720,256
1.50%120,000 614,574 1,266,918
1.00%80,000 406,451 829,423
0.50%40,000 201,606 407,277

From the table you can see that when you start today, your money grows over time. The higher the interest rate and the longer that you wait for it to grow, the more that you receive when you decide to get your money back. In this estimate, a 10 million deposit gets 5.98 million in a decade with 6% interest rate. On the other hand, the same amount gets 407,277 in the same time period with the interest of 0.5%.

For all discussions that you see later, you will see estimates of each product. Please bear in mind that they do not guarantee actual returns. Also, there might be some difference with earnings in reality due to differences on how often interest is credited and compounded. Documentary stamp fee is also not included when the estimates are computed.

Tonik Time Deposit

Interest: 6.00%
Minimum initial deposit: 5,000
Term: 6 months, 9 months, 12 months, 18 months, 24 months

Tonik, the newest digital-only bank in the Philippines, offers a very competitive 6% interest per annum on a six-month term time deposit account. The high interest, low initial capital outlay, and the short term are very attractive features of this product.

What’s more, clients can withdraw money before maturity and can still earn 1% annual interest.

The Singapore-based company also offers varying interest based on maturity.

MonthsInterest
66.00%
94.50%
124.75%
185.00%
245.25%
Digital-only bank Tonik time deposit interest

City Savings Bank Fixed Rate Time Deposit

Interest: 3.50% for a placement of 10 million pesos
Minimum initial deposit: 50,000
Term: 30 days, 60 days, 90 days, 180 days, 1 year, 1 & 1/2 years, or
18 months, 2 years, 3 years, 4 years, 5 years and 1 day

City Savings Bank Fixed Rate Time Deposit is a high-yield deposit product. Starting capital can be as low as 50,000 and the term ranges from as short as 30 days to over 5 years.

One benefit in investing long term is that taxes will be waived (except for corporate accounts) if you choose the longest term they’re offering, which is 5 years + 1 day.

Another advantage is it is fixed rate. So once the deposit and the length of maturity established, the interest remains the same. This protects investors from volatile market where interest may change.

See the table below showing growth on a 10 million deposit for 5 years.

YearCapitalBalance
110,000,000.0010,280,000.00
210,567,840.00
310,863,739.52
411,167,924.23
511,480,626.10

Sterling Bank of Asia Maxima 5 Long Term Deposits

Interest: 2.375% for placement of 5 million in 5 years
Minimum initial deposit:
₱100,000
Tenor:
1 month, 2 months, 3-4 months, 5-6 months, 7-9 months, 10-12 months, 1 year, 3 years, 5 years

The Maxima 5 Long Term Deposit is an offering from Sterling Bank of Asia. It is suitable for people who are looking for long-term savings at a rate higher than what is currently being provided by savings accounts.

They have other similar products, with the shortest term starting at 1 month for as low as ₱1,000 (Prima Time Deposit). Other peso-denominated products include Prima Plus Time Deposit, Solo Plus Special Savings Account, and Maxima 3 Long Term Deposits.

Here is how your money would grow in 5 years.

YearDepositBalance
15,000,0005,095,000
25,191,805
35,290,449
45,390,968
55,493,396

PBCOM Sure Earner

Interest: 2.25%
Minimum initial deposit: 50,000
Term: 5 years and 1 day

The PBCOM Sure Earner is a time deposit account with a low initial deposit of ₱50,000 that can already earn an above-average interest rate of 2.25% locked in for at least 5 years and 1 day. A certificate of deposit is issued as proof.

One good thing is that any interest earned is credited every month to a bank account declared as the settlement account. Moreover, depositor can enjoy a regular fixed income free-of-tax for the whole duration.

See below how your money grows in five years.

YearCapitalBalance
110,000,000.0010,180,000.00
210,363,240.00
310,549,778.32
410,739,674.33
510,932,988.47

Rizal Commercial Banking Corporation PHP Time Deposit

Interest: 2.125% for placement of ₱1,000,000 & up
Minimum initial deposit:
₱5,000
Tenor:
30 days to 1 year, 2 years to 4 years, 5 years + 1 day

RCBC PHP Time Deposit actually allows depositors to start earning 1.875% for as low as ₱100,000 for a term of at least five years. To maximize your returns, a deposit of a million pesos gives depositors an annual rate of 2.125%.

The bank also has other time deposit products. The shortest term available is 30 days and the lowest starting capital is ₱5,000. And this is how the money grows in five years.

YearCapitalBalance
11,000,000.001,017,000.00
21,034,289.00
31,051,871.91
41,069,753.74
51,087,939.55

CTBC Peso Time Deposit gives one of the highest interest rates in the market. Just like some of its peers, the bank offers tiered rates depending on the length of the maturity and the capital that is invested into the account.

For example, the lowest initial capital is ₱1,000, which can already earn 0.550% in a 1-2 months maturity. The higher the capital is and the longer the money remains in deposit, the higher the interest becomes.

Depositors may open the account by submitting two valid ID cards, signature specimen, and other files.

Interest: 2.125% for a placement of ₱10 million
Minimum initial deposit: 1,000
Term: 1-2 Months, 3 Months, 6 Months, 1 Year, 2 years, 3 years

See below the projection for a capital of 10 million in 3 years.

YearCapitalBalance
110,000,00010,170,000
210,342,890
310,518,719

Robinsons Bank Peso Time Deposit

Interest: 2.00% for placement of ₱5 million
Minimum initial deposit:
₱1,000
Tenor:
35 days to 5 years and 1 day

Robinsons Bank Peso Time Deposit offers competitive rate if you’re able to maintain saving the minimum capital for a specific period of time. A certificate of deposit is issued once an account is approved. Clients can choose terms: 35, 65, 95, and 182 days. They may also opt to choose 1, 3, and 5 years.

Not only that, depositors can actually start investing for as low ₱1,000. The crediting of the account is done when the account matures. Here’s an estimate of potential future returns for a deposit of 5 million pesos for five years.

YearCapitalBalance
15,000,000.005,080,000.00
25,161,280.00
35,243,860.48
45,327,762.25
55,413,006.44

PSBank Prime Time Deposit

PSBank Prime Time Deposit allows depositors to earn the above-average yield of 2% for a capital of ₱50,000. The returns are fixed to be credited when the investment matures, and any earned interests are provided tax breaks at the end of the term of 5 years.

Another advantage is that the account holder is given a credit facility. They can borrow up to 90% of the value of the deposit. And with their online account system, they can also check and manage their account virtually.

Interest: 2.00%
Minimum initial deposit: 50,000
Term: 5 years

YearDepositBalance
150,00051,000
252,020
353,060
454,122
555,204

EastWest Bank Peso Time Deposit

The Peso Long Term Time Deposit of EastWest Bank offers 1.375% if capital of at least ₱10,000 is held until maturity of 5 years. But that’s not all. The bank offers tiered interest and short terms such as 30 days and 60 days are available.

In the long term deposit, depositors can get interest either at the end of the term or through pay-out every three months. Another benefit is that taxes are waived when the term is set to mature in 5 years and 1 day.

Interest: 1.8613% for placement of P100,000 for 5 years + 1 day
Minimum initial deposit:
₱10,000
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.

YearOne-timeBalance
1         100,000.00         101,489.04
2         103,000.25
3         104,533.97
4         106,090.52
5         107,670.25

Security Bank Peso Time Deposit

The Peso Time Deposit of Security Bank is an account for those who would want to get one of the best rates 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: 2.27% for a minimum placement of ₱5 million
Minimum initial deposit:
₱100,000
Terms: 1 Month, 2 Months, 3 Months, 6 Months, 12 Months, 2 Years, 3 Years, 4 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.

Here’s how much a 5 million peso deposit would grow in four years.

YearDepositBalance
15,000,000.005,090,800.00
25,183,248.93
35,277,376.73
45,373,213.89
55,470,791.45

BPI Family Savings Bank Plan Ahead

BPI Family Savings Bank Plan Ahead is a five-year time deposit with high fixed interest rate. Rate is higher for a capital of a million and up. And because it is fixed, you can avoid having your money subject to unpredictable dips in interest.

What’s more, investors can get interest in two ways: monthly and lump sum. For monthly pay-out, the interest will be credited to a debit-card bank account. On the other hand, lump sum pay-out when the account matures at the end of the term.

And another advantage is that earnings are free from withholding tax.

Interest: 1.75% for placement of ₱1 million
Minimum initial deposit:
P50,000
Tenor:
5 years

YearCapitalBalance
11,000,000.001,014,000.00
21,028,196.00
31,042,590.74
41,057,187.01
51,071,987.63

Maybank Flexi Rate

The Maybank Flexi Rate allows clients to enjoy rates higher than can be earned in savings account. The interest that you earn can be directed to a savings account or it can be withdrawn at the end of the term.

Interest: 1.75% for a minimum placement of P5 million
Minimum initial deposit:
₱25,000
Terms: 30, 60, 90, 180, 359 days

This product follows tiered interest. People can start investing for as low as ₱25,000 in as short as 31 days, and they can already start earning interest higher than most savings accounts. The highest interest, as you can see from the first table of this article, is for a deposit of 5 million to mature in at least 91 days.

And below is an estimate of earnings for five years.

YearDepositBalance
15,000,0005,070,000
25,140,980
35,212,954
45,285,935
55,359,938

Maybank ADDvantage Advance Time Deposit

Another Maybank product, ADDvantage Advance Time Deposit allows depositors the flexibility of saving a minimum of ₱50,000 or US $3,000. The interest can be credited to a deposit account within the bank or checking account. The maturity is set at 1 year.

When the deposit is brought to term, the documentary stamp tax is waived. Otherwise, it would be charged.

Interest: 1.75%
Minimum initial deposit:
₱50,000
Terms: 30, 60, 90, 180, 359 days

And below is the forecast of the growth of money over time.

YearSavingsBalance
150,00050,700
251,410
352,130
452,859
553,599

China Bank Regular Time Deposit

Interest: 1.45% for placement of ₱5 million
Minimum initial deposit:
₱5,000
Tenor:
90, 180, 360 days

China Bank Time Deposit

China Bank Regular Time Deposit Account allows account management through any of their branches or their online portal. Investors can opt for automatic renewal as well as crediting of interest upon maturity. And it follows a tiered interest schedule where the higher the capital and the longer the term, the higher the interest rate becomes.

And of course, below is a projection of the money for five years. It is assumed that the capital is automatically rolled over to the following year.

YearCapitalBalance
15,000,000   5,058,000
2    5,116,673
3    5,176,026
4    5,236,068
5    5,296,806

Metrobank Online Time Deposit

Metrobank Online Time Deposit is an account that you can open on the web portal and without the need to drop by any branches. This product is exclusive to depositors who have an existing account. They have the flexibility to get both the principal and interest earned at the end of the term or automatically roll over either the principal, interest, or both for the next term.

Interest: 1.25% for a minimum placement of P5 million
Minimum initial deposit:
10,000
Terms: 1 month, 2 to 5 months, 6 months to 1 year

If you wish to open an account, you may need to head over to their online registration of the website and you will be required to have an existing eligible deposit account, which the money would be placed from and to which principal and interest would be credited at the end of the term depending on the selected pay-out option.

Here below is growth of a 5 million placement automatically renewed for 5 years.

YearDepositBalance
15,000,0005,050,000
25,100,500
35,151,505
45,203,020
55,255,050

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. Are you going for a fixed rate or floating rate?
  • 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. The one exception is when your financial situation drastically has changed.

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32 thoughts on “Philippine time deposit: Getting the best interest”

  1. You should really try comparing this to the digital banks out there that offer 3-4% interest with no strings attached (no minimum balance and no lock-in period!)
    The one I use now and am happy with is the Save Money feature on GCash which is powered by CIMB.

    1. Hi Jerome, thanks for sharing this. I heard that GCash offers savings account but I didn’t get a closer look into it. As I come to understand that the rate is only good for this year, so maybe we’ll wait and see in 2020 if this offer would still continue.

      On second thought: I’ve included it in the list. We still have a few months left. Thank you.

    1. I took a look at other banks’ TD rates, Secbank still offers higher TD interest rates despite the slashed interest rates by BSP.

  2. Hello, I’m only a student whose studying about this topic. May I know how time deposit is calculated? Can you give an example? Thank you 🙂

    1. See if this makes it easy for you
      (Amount) × (INTEREST RATE) ÷ 100 = (GROSS INTEREST RATE)
      And if you want the Net rate after 20% Tax,
      (Amount) × (INTEREST RATE) ÷ 100 – 20% = (NET INTEREST RATE)
      Example computation for 1M at 3.5% interest rate:
      1,000,000 × 3.5 ÷ 100 = 35000 (GROSS)
      1,000,000 × 3.5 ÷ 100 -20% = 28000 (NET)

        1. Hi Danet, I think the division by 100 is to get the percentage. Hope this answers your question.

  3. Thanks for this post, it is easier for me to compare interest rates and details are already provided that are easy to understand

      1. Thank you for your post,
        But due to covid can u tell me which banks I can time deposit online?

        1. Hi, Joe. You’re welcome. Please consider reaching out to your bank to see if they can facilitate online deposit.

  4. Hi I just want to ask ..if time deposit 1million for 1 year how much the money growth in 1 year how to sample computation in 6 months /1 year n 5 years thanks

    1. Hi, Hani. You can inquire at the bank. How much you get depends on the interest. Since you’d like to get the interest monthly, an account with a monthly term may suit you.

  5. Thanks for sharing the numbers. I find your rates much higher than what is published in the banks website. How do you secure the rates you quote above?

    1. Hi, Arlene. As mentioned in the article, banks publish new rates periodically. Please see the date the article is last updated and consider clicking the link to the banks to get the most accurate info. Thanks.

    1. Depends on the length of the term. It’s going to be credited monthly if the account expires (or auto-renews) in a month.

  6. I have some money to invest in either the Philippines or Australia. However, I find it difficult to compare interest rates on time deposit because I get them tax free in Australia (this depends on tax bracket, I am on low income because I am now a retiree so I don’t pay income tax now) whereas in the Philippines 20% is deducted on income. So, how can I compare, for example if Australia offers 1% and Philippines says 1.5% but takes 20% tax?

  7. Hello! I am a young adult and this article helps me a lot! I am learning how to manage my finances so this is such a big help! Thank you. keep on doing what you do 🙂

  8. Hello – wanna ask if is it safe to put your UITF investment say 5Million – even if the PDIC insuranance guaranteed up to 500 thousand is guaranteed and insured? Hope for yoir reply and comments sir – thank you

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