Savings Account or Time Deposit: Where to Put Your Extra Money
A term deposit is a bank service that makes deposit of money to be on withholding period so the depositor can only withdraw the money after that period without charge. If, however, you need to withdraw the money in a term deposit, you will be charged a fee for withdrawing it prior to the maturity time. In time deposit, the longer the holding period, the bigger the interest and so the profit from it. In US, a term deposit is called certificate of deposit or CD.
If you have a substantial amount of excess money, say, $10, 000 it is recommended to invest it in term deposit or certificate of deposit rather than on regular savings account.
Remember the money deposited in a time deposit or term deposit cannot be withdrawn before the maturity date while you can get your money on a savings account any time you want.
There is a certain charge or penalty you must pay whenever you want to withdraw your money in time deposit prior the maturity date ends.
Thus, it is advisable to finish the withholding period before withdrawing money from term deposit unless you badly needed the money.
If you are thinking to invest some of your money in term deposit, make sure that you have still enough money in your savings account to cover for emergency needs. The excess money can be deposited to time deposit for higher profit.
One advantage of investing money in time deposit or CD is that it gives higher interest rate than regular savings account.
If you invest your money in term deposit, it is insured by the bank and the government up to P500,000 in the Philippines. In the US, certificate of deposit is also guaranteed by FDIC or NCUA.
You can select where to put your money, in savings account or time deposit. Keep in mind that money in time deposit earns higher interest with holding period while money on savings account earns low interest with big liquidity.
In order to apply a time deposit account, you should come to the bank of your choice or you can apply in the Internet. One bank that offers high interest rates in the Philippines for time deposit is BPI.
To get helpful details on how to open a Union Bank Philippines account, you may visit Financial Management blog for more articles on saving, investing and earn money online. Gil Tenorio is a personal investment blogger who loves blogging on saving, investing and make money online.
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