Time Deposit Interest Rate

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Do you know that one of the easier ways of making your money work for you is by investing in a time deposit account? A time deposit account is an investment account and a type of savings account in which money is deposited for a stated period of time and a fixed interest rate is paid at the end of that period.

It is a safer investment option when compared to other investment types. Opening a time deposit account is both quick and easy and all you have to do is to deposit money into the account for a given period of time, for it to earn interest for you.

Withholding tax on interest earned; Peso Time Deposit: Php 1,000.00: 30, 60, 90, 180, 360 Days: Subject to pretermination penalty: 20%: Premium Flexi Earner: Php 10,000.00: 5 years: Subject to pretermination penalty: Tax exempt if the placement is held until maturity. If preterminated, interest earned is subject to withholding tax: Dollar Time. A time deposit or TD is a type of investment account, similar to a savings account, where you keep your savings for a set amount of time without withdrawing it. It has higher interest rates than a regular savings account and is considered “risk-free.” Expect higher earnings via interest the longer you keep your time deposit. Online submission for Time Deposit requests. Due to the COVID-19 outbreak, we will accept your online requests to withdraw or amend your Time Deposit instructions without visiting our branches. Plus, enjoy our promotional interest rate when you apply for a SGD Time Deposit.

Below are reasons why you should open a fixed deposit account today:

1. It encourages a savings habit as the money you deposit needs to be in the account for a period of time without you making any withdrawal.

2. Investing in a time deposit account earns you a higher interest rate than depositing your money in a savings account.

3. You are assured of returns for your investment

4. The account helps to act as a fall back for your business in the event of a cash flow squeeze or can be used to meet your future cash requirements.

5. Interest is payable at maturity; annually or monthly depending on the term you chose or you could use the money to buy assets if you want.

6. You get to choose how long you want to invest your money in a fixed deposit account ranging from 30 days to three.

7. You can choose to have more than one time deposit account if you want to save for different goals.

A time deposit is a good option to “park” your money. The interest is considerably lower than other investment options, but the security it brings is what some people prefer.

This article will address the most common misconception of people about the interest rates of time deposit. Some people think that if your bank says that their interest rate is 2% then you’ll get the whole 2% even if you prematurely withdraw the funds or if you got the shorter term.

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You won’t get the whole 2%. Here is the proper way to compute your time deposit interest.

Let’s say you deposited P100,000 in a time deposit account with 2% interest per annum. You originally opted for the 1-year maturity but an emergency came and you have to withdraw your money after just 60 days.

You will not get P102,000 which is the basic 2% computation. Here are the steps:

STEP 1

Time Deposit Interest Rate

Get the principal amount and multiply by the interest per annum.

Time Deposit Interest Rate

P100,000 * 2% = P2,000

STEP 2

Get the total number of days and divide by 365 days. In this case, 60 days.

60 / 365 = 0.16

Time Deposit Interest Rate

STEP 3

Multiply by your total in step 1.

2,000 * 0.16 = P320

Time Deposit Interest Rate

STEP 4

Multiply by .80. This is because the interest that you will get from a time deposit account will be subject to 20% tax. This means you only get 80% of your interest earnings.

Time Deposit Interest Rate Calculator

320 * 0.80 = P256

STEP 5

Time Deposit Interest Rate In Post Office 2020

Add your step 4 total to the principal amount, then that is what you will get from the bank. Aside from the penalties and charges for premature withdrawal.

P100,000 + P256 = P100,256.00

Time Deposit Interest Rate In Post Office

This is the conventional computation, you may also want to ask your bank if they use the 365 count or the 360. When computing your interest for premature withdrawal of time investment funds, you also have to remember that aside from the tax and the low interest, you will also be subject to penalties or charges depending on the bank.