Pros and Cons of Time Deposit in Philippines
Are you wondering where to invest your hard earned money in order to build a strong financial profile? Are you thinking about a long-term plan? If you are, then time-deposit might be the right choice for you. Time-deposit is a safe choice which is one of the main reasons that so many Filipinos prefer it while investing. The popularity of Time Deposit is fueled by other factors as well. Some of them are listed below along with a few of the reasons why time deposits might not be right for you:
Pros of Time Deposit
The High interest rates for your deposit has to be one of the best features of the time deposit. ·
It’s a safe bet. Your investment is not at risk and does not experience fluctuations with the unstable market. You are assured to receive your investment amount, even if by some unlikely chance that you do not get the interest you are supposed to receive.
Time deposit is one of the easiest types of investments to set up and to learn about. Much more so than stocks and investing in property.
They are also not as risky as property or stocks. You can sleep at night in peace knowing that you are not putting your family’s future at risk by investing in a dicey investment. Planning your future is easy with the time deposit.
You can decide the period that you want to invest in. You can choose any length of period, from one-month to even seven years. Depending on how long you keep the deposit, you can also decide the frequency of your interest payments.
You have three options when it comes to how you want the interest. You can either have it paid out by check, have it deposited straight to your bank account or you could have it reinvested so that you can accumulate the interest.
Since it is a fixed deposit, chances are that you will learn to save your monthly salary better.
Cons of Time Deposit
This is a major commitment. You have to be completely sure that you want it and can afford to put away a chunk of your salary, in a plan that cannot be touched. Time deposit is a fixed deposit which means that you cannot simply take out money from your savings if you are short of money one month.
If you need to withdraw money, and there is no going around it, some banks and financial institutions may allow you to withdraw early, however it comes with a heavy fine. This amount depends on how much time you have left for the term to end. Are you ready to take such a chance?
If you go for a more frequent interest payment, it may mean a much lower rate.
With fixed interest rate for the period that you have committed to, you will not be able to take advantage of any increase in cash rate.
Knowing these facts it should be simple to make an informed choice whether a time deposit is right for you.
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