Camsdcute’s Lair

Posts Tagged ‘PDIC’

President is agreeing in the proposal to increase the maximum amount of PDIC coverage for each depositor from Php250,000.00 to Php 1,000,000.00. With the recent shakes in the economy and the uncertainties felt for the banking sectors especially in the U.S., people here in the Philippines panicked. Most of the people here are known for that kind of attitude (like the panic which ensued when there was a rice shortage and melamine outbreak). Most pulled out their investments particularly in mutual funds and even from big banks. Some say they’d rather keep their money under their beds.

This increase in the maximum coverage will surely entice people to put in their money in banks. This is the main objective of the raise – to promote confidence in people to entrust their money in our financial institutions. After all, are banks are stable and Asian countries have a better position of booming their economies today than the US which is in recession.

You have Php10, 000.00 and you don’t know where to put it. This amount is not that big and you’re looking for growth. Do you invest it or just keep it in your savings account? First question is, do you have enough money available for emergency purposes? If yes, then go and invest this 10,000. The rule of thumb is to put approximately 3-6 times of your monthly salary in your savings account that can be readily pulled out in case you need it.

Next question is in how many years are you going to withdraw this money?

One option is to put it in a time deposit account. You must ask and survey banks and other institutions and look for one that offers the highest interest rate for TDs. Cooperatives and rural banks often gives you slightly higher interest rates than larger banks. Rural banks are PDIC insured so you’re guaranteed of getting your money back in case the bank files bankruptcy. Maximum amount covered per depositor is Php250,000.00.

You can also use this amount to play with stocks. Make sure that you do a lot of research before you go into investing in stocks. You can join some online trading sites. One is the CitisecOnline although I am not definite on how much is the minimum initial investment to open an account.

Another one is to engage in a small buy-and-sell business and use your money to buy your merchandise.

If you do not need this amount in the next 5 or 10 years, then you can place this in Mutual Funds.