Savings Account or Term Deposit: Where to Invest Your Money

A term deposit is a bank service that makes deposit of money to be on withholding period so the depositor can only get the money after that duration without penalty. If, however, you want to check out the money in a term deposit, you will be charged a fee for withdrawing it before the maturity date. In time deposit, the longer the holding period, the higher the interest and so the earnings from it. In US, a term deposit is called certificate of deposit or CD.

If you have a substantial amount of extra money, say, $10, 000 it is recommended to put it in time deposit or certificate of deposit rather than on normal savings account.

Keep in mind the money deposited in a time deposit or term deposit cannot be withdrawn before the maturity date while you can get your money on a savings account any moment you like.

There is a certain fee or penalty you need to pay whenever you like to withdraw your money in time deposit prior the maturity date ends.

Therefore, it is better to finish the holding period before withdrawing money from term deposit except you desperately needed the money.

If you are thinking to invest some of your money in term deposit, keep in mind that you have still enough money in your bank account to cover for emergency needs. The surplus money can be put to term deposit for higher profit.

One benefit of investing money in time deposit or CD is that it gives higher interest rate than regular bank account.

If you put 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 invest your money, in savings account or time deposit. Bear in mind that money in term deposit gives higher interest with holding period while money on savings account earns low interest with big liquidity.

In order to open a term deposit account, you need to come to the bank of your choice or you can apply in the Internet. One bank that gives high interest rates in the Philippines for time deposit is BPI.

For helpful information on how to open a Union Bank Philippines account, you may visit Financial Management blog for helpful articles on saving, investment and earn money online. Gily Tenorio is a personal finance blogger who likes blogging on saving, investment and earn money online.