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.
Unit Investment Trust Fund
This is something I already featured in a past blog post. Read: What is UITF? Unit Investment Trust Fund or UITF for short is a collective investment thing that banks offer. Think of it as a mutual fund but instead of a trusted private financial group like FAMI, known commercial banks provide this investment option to the public.
How UITFs work?
Money from various investors are pooled together into one fund to accomplish an investment objective.
To Whom Do I Recommend UITF?
If you don’t have much knowledge about stock market or trading and you don’t have that much time to really look after your investments, then UITF is for you. I also recommend this to people who just started knowing the benefits of investing and are a dad or mom looking for a better way to save up for the future.
How Much Do You Need?
Depending on the bank you will choose, opening an account is as low as 10,000pesos. You can top up this with as low as 1,000pesos a month.
Return of Investment?
Definitely promise higher return than a savings account. Return will depend of where your money is being investment more commonly known as a portfolio. Your bank will most probably explain how much percentage goes to real estate, information technology companies etc.
READ: What is Peso Cost Averaging Method?
Retail Treasury Bonds, Treasury Bonds and Treasury Bills
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.
To Whom Do I Recommend?
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.
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
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
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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