Commercial Bank
Banking with big names like BDO, Metrobank or BPI gives you convenience, but don’t expect your money to grow. With interest rates of less than 1% for Savings and 3%-4% for Time Deposit – your interest earnings can only go as far as buying you a McDo Happy Meal. But, with 24/7 ATM, online banking, and ease in drawing checks, it is still advisable to maintain Savings and Current Accounts with Commercial Banks for convenience.
Bank Products you can avail:
Savings Account – good tool to fund your current account electronically
Current Account – to pay for your monthly amortization (auto loan, housing loan, etc.)
Time Deposit – to park your spare cash, and earn a little more than the 1%p.a. interest derived from Savings Account
Treasury Bills/Bonds – it will give your better yield, but minimum amount of investment may be steep for a typical employee
Rural Bank
If you want your money to grow with very minimal risk, avail of Time Deposits from Rural Banks (make sure the bank is PDIC insured – you can check the PDIC website). Most Rural Banks offer very competitive rates from 14% to as high as 20% per annum interest for Time Deposits (3 to 5 year placement). Most people are hesitant in dealing with Rural Banks, questioning their stability – but, there are several Rural Banks with long and credible track records – even longer than some commercial banks. Also, so long as your money is insured by PDIC (covered up to 250,000), then you should not worry. Most people I know open Time Deposits with multiple Rural Banks (max of 250,000 only per bank), then their monthly interests are automatically deposited to their nominated Commercial Bank. Since their amount of exposure doesn’t exceed 250,000 – they safe keep their interest earnings, and at the same time their initial capital of 250,000 is insured by PDIC. How else can you go wrong?
Below is a list of some Rural Banks offering competitive Time Deposit rates: (lifted from http://www.pinoymoneytalk.com/2008/01/18/double-your-money-banks/#more-773 )
1. Rural Bank of Paranaque – 5-years, 16% per annum (p.a.), interest paid monthly
2. G7 Bank – 8.25% p.a. gross for a P200,000 30-day time deposit
3. Rural Bank of Makati – 5-years, 10.5% p.a., interest paid at the end of term; 5.0% if interest is paid monthly
4. Philippine Rural Banking Corp. in Jollibee, Ortigas – 5-years, 10% p.a., interest paid monthly; double your money in 6 years, locked-in
5. People’s Bank Inc. along Alabang Zapote, near South Mall – double your money in 5 years, locked-in
6. Accord Bank in Ortigas Ext. near Antiopolo – double your money in 6 years, interest paid every 6 months
7. Grower’s Bank in Angono Rizal – double your money in 6 years, interest paid every 6 months
8. Banco San Juan in JP Rizal, near ABC Mall – 5-years, 8.25% p.a., locked-in
9. Planters Bank – 5.5% p.a. gross for 1-year placement; 6.5% p.a. tax-free for 5-year placement
10. First Country Bank – 5-years, 14% p.a., interest paid monthly
11. Rural Bank of Norzagaray (Bulacan) – double your money in 6 years
12. Finman Rural Bank of Pasig – deposit P27 for 6 days a week for 5 years, total cash out is P42,120, lump sum to be paid at the end of term is P50,000
13. University Savings and Loan Bank – 8% net p.a., paid lump sum (term to be confirmed)14. Producers Rural Bank – 6% net p.a. (term to be confirmed)
For a complete list of Rural Banks and to know more about it, check out this website
Rural Bankers Association of the Philippines (RBAP)
