Sunday, February 3, 2013

BDO cuts interest rates too (after MBT and BPI)

(image from No copyright infringement intended.)

I already blogged in a previous post about the rate cuts on deposits products of Metrobank and BPI this year.

And now, BDO has imposed the same rate decrease on savings products. See the new rates on their website.

0.25% annual interest rate.  Seriously?

If you have P100,000 in a savings account in any of these three banks, that will mean an interest earning of P250 after a year. And if you reduce the automatically deducted 20% withholding tax, that earning will be sliced to just P200.

Like what I said before, saving in a bank is for emergency and liquidity purposes. For your retirement or long-term goals, invest in other instruments, not in bank deposit products.

Ask your banker about SDA, UITF, or MF. Just please DO NOT put your all of your life savings in investment instruments. Maintain an emergency fund.

Knowledge is power... but true power comes after we act on that knowledge.


  1. Great post. Yeah, this is why most of my funds are in stocks right now. Really ugly interest rates. Even the "high-yield" savings accounts have just the same interest rates as savings accounts a few years ago.

    But, yeah I do keep my emergency fund in a high-yield account.

  2. Same here. But I am actually in the process of slowly transferring half of my emergency fund in a no-holding-period bond fund. Even the high-yield account does not satisfy me now. But I still plan and will keep half of the emergency fund in that high-yield ATM account.

    I believe there is no one limiting me to divulge the following:
    high-yield account = BPI Family Maxi-saver savings account (w/ ATM)
    bond fund with no holding period = BPI Premium Bond Fund (UITF)

    BPI should hire me! lol

  3. Aren't uitf's subject to the 20% witholding tax, too? Will this be automatically deducted once you redeem the fund?

  4. As far as I know, UITF's NAVPU are already net of taxes. Currently, no withholding tax will be deducted upon redemption.

    As a supporting information, I checked the FAQ's of BDO UITF:
    "16. Are investment proceeds from the UITFs subject to taxes?

    Taxes, when due, are already deducted when computing the NAVPU. Thus, proceeds from UITFs are already net of taxes."

    Hope this helps you. =)


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