Savings Account or Term Deposit: Where to Put Your Money
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A time deposit is a bank service that makes deposit of money to be on holding period so the depositor can only get the money after that period without charge. If, for instance, you want to withdraw the money in a term deposit, you will be charged a fee for withdrawing it before the maturity time. In term deposit, the longer the holding period, the bigger 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 invest it in term deposit or certificate of deposit rather than on regular savings account.
Keep in mind the money put in a time deposit or term deposit cannot be withdrawn priot to the maturity date on the other hand you can withdraw your money on a savings account any moment you like.
There is a certain fee or penalty you must pay if you like to withdraw your money in time deposit prior the maturity date ends.
Thus, it is advisable to finish the holding period before withdrawing money from term deposit except you badly needed the money.
If you are planning to put some of your money in term deposit, keep in mind that you have still adequate money in your bank account to compensate for emergency needs. The excess money can be put to term deposit for higher profit.
One advantage of investing money in term deposit or CD is that it earns higher interest rate than normal 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 insured by FDIC or NCUA.
You can select where to invest your money, in savings account or term deposit. Bear in mind that money in term deposit gives higher interest with holding period while money on savings account gives low interest with high liquidity.
In order to apply a time deposit account, you need to come to the bank of your choice or you can apply in the Internet. One bank that offers high interest rates in the Philippines for term deposit is BPI.
Article Source: Articlelogy.com
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