Last week I shared to you the many advantages of getting an online bank account. You can read the post HERE. Thank you for the positive feedback from all SavingsPinay readers. I am really happy to have shared a valuable information to everyone.
Now to
keep up with all these "valuable information," I decided to give you Investment Options You Can Try With Your Bank. I
know how most of us will have a savings account for our spare money. Yes,
having a savings account is indeed a good primer to save money and not waste it
but it won't make you achieve financial freedom.
Why Invest?
Investing
is one of the many ways that you can make money work for you. It is something
highly suggested by financial planners to start thinking about a good
investment venture to try.
I know
for a fact that not everyone is into investing.
Others feel uncomfortable entrusting the money they worked hard for into
something high-risk. So for these type of people who can't take the risk of a
mutual fund or stock investing, here are investment options you can try
that your bank should probably offer.
Unit Investment Trust Fund
READ: What is Peso Cost Averaging Method?
Retail Treasury Bonds, Treasury Bonds and Treasury Bills
The above investment options may sound foreign for common individuals who are just new to investing. Retail Treasury Bonds, Treasury Bonds and Treasury Bills are backed up by the government so they are pretty safe investment. Let me differentiate the three from each other based on their meaning.
How Retails Treasury Bond, Treasury Bonds and Treasury Bills Work?
- Retails Treasury Bond (RTB) is a fixed-income instrument issued by the government as a way of raising funds.
- Treasury Bonds are similar with Retails Treasury Bond but this investment option requires a lower initial investment amount.
- Treasury Bills are almost similar with Retail Treasury Bond and Treasury Bonds but unlike RTB and Treasury Bonds, Treasury Bills are considered short term investments.
These investment options are perfect for those who have more money to start investing with and also those who have spare money to invest in a long term basis.
How Much Do You Need?
Retail Treasury Bonds, Treasury Bonds and Treasury Bills need at least 100,000pesos to start investing.
Return of Investments?
These are pretty good investment vehicle for individuals who want to grow their portfolio income. A sample computation of Retail Treasury Bonds ROI:
These are pretty good investment vehicle for individuals who want to grow their portfolio income. A sample computation of Retail Treasury Bonds ROI:
Money Invested: 50,000pesos in a 3-year RTB
Coupon every quarter: 8.5%
Quarterly Interest Rate: (50,000pesos X 8.5% X 1/4) = 1,062.50pesos
Less Withholding Tax of 20% (212.50pesos)
Total ROI for every Quarter: 850pesos
Time Deposits
Aside from Savings Account, Time Deposits are the most common investment option of Pinoys.
How Time Deposits Work?
The money you invested will be kept by the bank for a fixed period of time. The duration is usually 30 days and can be extended to 60 days or 90 days and more. Your money will earn an interest higher than the usual savings account. Remember though that your money must stay on the back within the given period you choose for if not it may cost you a fee,
To Whom Do Recommend This?
This is a perfect investment for someone who don't have that much money for RTBs, Treasury Bonds and Treasury Bills but want to earn an interest higher than usual savings account. For this I suggest that you choose your bank carefully.
Read: Are You Ready To Ride? Here are Investment Vehicles You Can Try
How Time Deposits Work?
The money you invested will be kept by the bank for a fixed period of time. The duration is usually 30 days and can be extended to 60 days or 90 days and more. Your money will earn an interest higher than the usual savings account. Remember though that your money must stay on the back within the given period you choose for if not it may cost you a fee,
To Whom Do Recommend This?
This is a perfect investment for someone who don't have that much money for RTBs, Treasury Bonds and Treasury Bills but want to earn an interest higher than usual savings account. For this I suggest that you choose your bank carefully.
Read: Are You Ready To Ride? Here are Investment Vehicles You Can Try
How Much Do You Need?
This actually depends on the bank of your choice. There are banks offering a Time Deposit Certificate for just 10,000pesos. The higher the money you will leave in the bank and the longer the investing period is, the higher the return.
Return of Investment?
Time Deposits are not considered as high risk because you literally just make your money seat in the bank and wait for it to mature. Interest range may be between 1.5% to 3.5% which is significantly higher compared to usual savings account.
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This actually depends on the bank of your choice. There are banks offering a Time Deposit Certificate for just 10,000pesos. The higher the money you will leave in the bank and the longer the investing period is, the higher the return.
Return of Investment?
Time Deposits are not considered as high risk because you literally just make your money seat in the bank and wait for it to mature. Interest range may be between 1.5% to 3.5% which is significantly higher compared to usual savings account.
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I already got my UITF from BDO! Yeah!
ReplyDeleteNice one Ms. Neri!!!!
DeleteGo lang ng Go in achieving financial freedom!! I love your blog!!! From PUP ka din po?
These are great tips for those who are in the process of planning their investments or savings. I believe that college students now should start saving (through their allowances) and investment in any of these. It's something I wished I have done before so I have bigger savings and even an emergency fund.
ReplyDelete♥ Louise | www.louisechelleblog.com
Hi Ms. Louise! Yan din yung isa sa mga goal ko why I started this blog. I want college students or yung mga nasa early 20's nila to know that the earlier they save and invest, the better.
DeleteNo need to regret na Ma'am, I can feel naman po that you are striving to save! :)
Ang ganda po ng blog niyo!!! Hehe! Ang sarap basahin! :)