BSP Lowered Its Term Deposit Facility Volume | Marvin Germo

BSP Lowered Its Term Deposit Facility Volume

By: Marvin Germo | April 19, 2019

Decrease in 1-Week Term Deposit Yields

Bangko Sentral ng Pilipinas (BSP), the central bank, dropped its facility volume to a record low, causing a decrease in earnings on 1-week term deposits offered by the government. Just last week, the total amount of the tenders for the term deposit facility (TDF) was P30.15 billion, which was lower compared to the P50.321 billion in tenders a week ago. The current tender for TDF, however, is more than thrice what the BSP put on the auction book of P10 billion. Is this something that should worry the investors of term deposits? Aside from BSP’s TDF, are there any options for term deposit investments?

Catch me in my live training events! (quick plug)

The heart of why I do this seminars is I want to build a generation of Filipinos with the right foundation in stock investing.  I want to bring smart investing to every Filipino around the world! If you would like to know more on how you could time the market checkout the trainings below.

Stock Smarts Cebu —  April 6 & 7, 2019
Investing Insights Japan – April 13, 2019
Stock Smarts Singapore —  May 18 & 19, 2019
Investment Conference 2019 – May 25, 2019
Stock Smarts Manila —  June 15, 16, 22, 23, & 29, 2019
Stock Smarts Iloilo – July 6 & 7, 2019
Stock Smarts Cagayan De Oro – July 20 & 21, 2019
Stock Smarts Hong Kong – August 11, 2019
Stock Smarts UAE – August 30 – September 3, 2019
Stock Smarts Qatar —  October 3 – 6, 2019
Stock Smarts Taiwan – November 2, 2019

BSP Offered 1-Week Papers Only

This holy week, BSP is not offering 14- and 28-day papers. And despite the decline in bids and lower TDF volume, the total tenders for the seven-day term deposit took a higher demand compared to the P29.696 billion last April 10. As banks seek for lower returns for the seven-day term deposits, the accepted yields now range from 4.75% to 4.8%, much lower than the 4.85% to 4.97% return a week before. The average rate for TDF offering is now 4.7764%, which dropped from 4.8943% as what the previous offering showed.

Banks That Offer The Best Time Deposit Rates

Aside from the 1-week term deposits, you can invest in other time deposit products offered by various banks in country. Currently, Maybank, BPI, Chinabank, Metrobank, and Unionbank provide good rates depending on the term deposit product you prefer. For Maybank, it’s Classic Time Deposit with a minimum deposit of P25,000 can yield 1.25% in a span of 6 months. BPI Regular Time Deposit offers 0.88% to 1.13% interest rate for 6 months. Chinabank’s Diamond Savings has 0.75% interest rate with a minimum deposit of P50,000. Metrobank’s Peso Regular Time Deposit also stands at 0.75% with a minimum deposit of P10,000. And Unionbank’s Peso Time Deposit gives 0.58% with a minimum of P50,000.

Other Investment Portfolio

If in case term deposit doesn’t work for you and you find the term unfit for your goal as an investor, you can always opt to invest in other portfolio. A good investment type following this is mutual fund. A mutual fund will allow you to have your own fund manager who’s in charge to invest and grow the funds. Although a bit different from term deposit since the return is not fixed, mutual fund has lower risk compared to other investment types like stocks.

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