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Hi All,

 

I would like to know which bank locally offers the best interest rates for a time deposit. I would my money to earn some interest since I am not using it as of this moment. :) Its not that big, but a few bucks added is still a good thing.

 

If somebody could compute for me the possible interest I would earn from 50k to 70k deposit.

 

(Mods if this is in the wrong place, please do move it. :) sorry for the inconvenience)

 

An email could also be nice, dgr8malcoxx@yahoo.com

 

THANK YOU!

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Hi All,

 

I would like to know which bank locally offers the best interest rates for a time deposit. I would my money to earn some interest since I am not using it as of this moment. :) Its not that big, but a few bucks added is still a good thing.

 

If somebody could compute for me the possible interest I would earn from 50k to 70k deposit.

 

(Mods if this is in the wrong place, please do move it. :) sorry for the inconvenience)

 

An email could also be nice, dgr8malcoxx@yahoo.com

 

THANK YOU!

 

Interest rates are pretty low all across the board nowadays. Your rate will depend on the length of time and the amount. To compute for your income, multiply your cash by the rate which is on a per annum basis. The result is your interest income for one year then multiply this by x/360 where x is the number of actual days it is invested then multiply it again by .8 to get your income net of withholding tax.

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yes they are too low now.

to cite an example: i placed a 300k time deposit with BDO around 4 months ago. for one month, the interest was only 300 pesos++. may 20% deduction pa for witholding tax. so it means that if i leave it there for a year (300*12) = 3,600 less 20% = 2,880.00.

 

if you have around 70k, invest it in bond (mutual funds). its liquid and the average return for 2007 is around 14% PA. wala pang withholding tax. although may fees sila na dinededuct if you place in into the fund for below one year. but then again, subject to rate increase and decrease ang bond funds, although minimal lang.

 

(70,000 * 14%) = 79,800.00

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That's very strange that the interest rates in the Philippines are really low right now. It was expected by the banks in the United States that interest rates will surge up across the whole world because of America's economy right now.

 

Many factors contribute to this, locally money supply is still high, everyone, even the government seems to have a lot of cash with no investment outlets in sight. There is hesitation to lock in for long term due to the fears of the recession in the US.

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  • 2 weeks later...
sir, sorry if this is OT, but since you are talking about interest, how do you compute the interest rates in a bank if you get a loan? like for example a housing loan, if you get 1M with a 11% interest rate for 20 years, how much would the interest and how do you/they computer that?

 

TIA

 

Normally for a housing loan, they compute for the effective rate, which is the annual interest rate multiplied by the outstanding balance of the loan. If you pay for the principal on a monthly or quarterly basis, then the next interest payment would be computed only on the outstanding balance left, since you had already paid part of the principal. So technically, your interest payments would get smaller and smaller as your principal amount outstanding diminishes over the long term. You have to be careful about banks or lenders that charge straight line interest. In other words, the interest payment is computed based on the principal amount of the loan of 1 million all through the 20 years.

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Normally for a housing loan, they compute for the effective rate, which is the annual interest rate multiplied by the outstanding balance of the loan. If you pay for the principal on a monthly or quarterly basis, then the next interest payment would be computed only on the outstanding balance left, since you had already paid part of the principal. So technically, your interest payments would get smaller and smaller as your principal amount outstanding diminishes over the long term. You have to be careful about banks or lenders that charge straight line interest. In other words, the interest payment is computed based on the principal amount of the loan of 1 million all through the 20 years.

 

Thanks... I'll take note of that sir.

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  • 2 weeks later...

how do we invest in bonds?

 

yes they are too low now.

to cite an example: i placed a 300k time deposit with BDO around 4 months ago. for one month, the interest was only 300 pesos++. may 20% deduction pa for witholding tax. so it means that if i leave it there for a year (300*12) = 3,600 less 20% = 2,880.00.

 

if you have around 70k, invest it in bond (mutual funds). its liquid and the average return for 2007 is around 14% PA. wala pang withholding tax. although may fees sila na dinededuct if you place in into the fund for below one year. but then again, subject to rate increase and decrease ang bond funds, although minimal lang.

 

(70,000 * 14%) = 79,800.00

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Guest lustfortravel
@google

 

do u know the minimum for mutual funds for BDO, coz' currently, the min for BPI mutual fund and fixed income is 100thou.

 

as far as i know, BPI already lowered it to 50k minimum and 10k for additional placements. that's what my relationship manager told me.

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how do we invest in bonds?

 

 

you can either go for the bond funds or buy the actual bonds yourself. I believe the bigger banks like bdo or bpi has a minimum of 50k - 100k. There are smaller banks however that sell retail treasury bonds which require a minimum investment of 5k only. I believe Asiatrust Bank sells these retail treasury bonds.

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Guest lustfortravel
you can either go for the bond funds or buy the actual bonds yourself. I believe the bigger banks like bdo or bpi has a minimum of 50k - 100k. There are smaller banks however that sell retail treasury bonds which require a minimum investment of 5k only. I believe Asiatrust Bank sells these retail treasury bonds.

 

the same minimum of 5k applies to all accredited GS dealers especially if it is bought during the IPO period. I believe that is the published minimum by BTR.

 

personally, i like buying retail bonds only during the IPO period - the accrued interest and the premium will turn me off since the actual net return will be lower than the coupon rate. of course, i might consider it if it is sold at a relative discount.

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  • 3 months later...

Pakiclarify lang kasi medyo nalilito ako about time deposit computations:

 

For example I have 200k,

then I put 100k into a time deposit account for 60 days at 2.5% interest,

and I put the remaining 100k in a TD account for 30 days at 2% interest. Then after that 30 days, I redeposited the whole amount (100k + interest @ 30 day period) on another 30 day TD account.

 

Which one of the 2 will yield higher interest? Mas maganda po sana kung meron computation including tax deduction.. thanks!

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Pakiclarify lang kasi medyo nalilito ako about time deposit computations:

 

For example I have 200k,

then I put 100k into a time deposit account for 60 days at 2.5% interest,

and I put the remaining 100k in a TD account for 30 days at 2% interest. Then after that 30 days, I redeposited the whole amount (100k + interest @ 30 day period) on another 30 day TD account.

 

Which one of the 2 will yield higher interest? Mas maganda po sana kung meron computation including tax deduction.. thanks!

 

2.5% TD for 60d:

 

PHP100000 x 2.5% X 0.80 X 60/365 = W

 

2.0% TD for 30d with reinvestment:

 

PHP100000 x 2.0% X 0.80 X 30/365 = Y

PHP(Y) X 2.0% X 0.80 X 30/365 = Z

 

Compare W and Z. The 0.80 in the formula takes into account the tax rate of 20%.

 

Hope that helps. :evil:

 

Hope that helps.

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2.5% TD for 60d:

 

PHP100000 x 2.5% X 0.80 X 60/365 = W

 

2.0% TD for 30d with reinvestment:

 

PHP100000 x 2.0% X 0.80 X 30/365 = Y

PHP(Y) X 2.0% X 0.80 X 30/365 = Z

 

Compare W and Z. The 0.80 in the formula takes into account the tax rate of 20%.

 

Hope that helps. :evil:

 

Hope that helps.

i think, there something wrong with the last formula.

dapat ata ganito:

(PHP100000 + Y) X 2.0% X 0.80 X 30/365 = Z

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i think, there something wrong with the last formula.

dapat ata ganito:

(PHP100000 + Y) X 2.0% X 0.80 X 30/365 = Z

 

I think the original formula of:

 

"2.0% TD for 30d with reinvestment:

 

PHP100000 x 2.0% X 0.80 X 30/365 = Y

PHP(Y) X 2.0% X 0.80 X 30/365 = Z"

 

is correct. Here's his question:

 

For example I have 200k, then I put 100k into a time deposit account for 60 days at 2.5% interest,

and I put the remaining 100k in a TD account for 30 days at 2% interest. Then after that 30 days, I redeposited the whole amount (100k + interest @ 30 day period) on another 30 day TD account.

 

:zorro:

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  • 1 month later...

When interest rates start to move up (and they will very soon - in fact they have started to increase), these Bond Funds (which are valued on a mark-to-market basis) will lose money (bond prices move inversely with interest rates). Past returns are NEVER an indication of future performance.

 

J

 

yes they are too low now.

to cite an example: i placed a 300k time deposit with BDO around 4 months ago. for one month, the interest was only 300 pesos++. may 20% deduction pa for witholding tax. so it means that if i leave it there for a year (300*12) = 3,600 less 20% = 2,880.00.

 

if you have around 70k, invest it in bond (mutual funds). its liquid and the average return for 2007 is around 14% PA. wala pang withholding tax. although may fees sila na dinededuct if you place in into the fund for below one year. but then again, subject to rate increase and decrease ang bond funds, although minimal lang.

 

(70,000 * 14%) = 79,800.00

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  • 3 weeks later...

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