Banks are marketing special deposit account products more aggressively these days. With the low returns from time deposits and fixed-income instruments, people are looking for more alternatives and I actually witnessed this in a bank branch the other day.
The Philippine Daily Inquirer’s Doris Dumlao reports today that as of February 8, SDAs have sucked in P546 billion of the money in the banking system. Read her article here.
Here are some useful figures to remember from this article:
P546.35 billion – money placed in SDAs as of Feb. 8, which is more than double the P233.65 billion absorbed by the BSP from the banking system via its overnight borrowing facility as of the same date.
6% to 6.5% — the range of yields of SDAs with varying maturity that make them more attractive than any other fixed-income instruments. Mutual funds with access to SDAs—those affiliated with banks—outperformed other fixed-income securities-based mutual funds in 2007.
5.88% — yields of 10-year Treasury bonds auctioned by the National Government last January.
8.06% — average yield of 10-year T-bonds issued in 2006
11.69% – average yield of 10-year T-bonds issued in 2005
Looking at these figures, it seems the current state of the economy is good for banks. These are very cheap funds that they can lend at high rates. Maybe, it would be a good idea to watch out how bank stocks will do this year.
April 29th, 2009 at 10:20 am
[...] Special deposit accounts as alternative to time deposits [...]
November 28th, 2008 at 4:18 pm
wish banks can have savings product like a savings builder.. one gets to choose a savings plan with corresponding interest…there is a fixed amount of savings u deposit every month…
August 15th, 2008 at 11:52 pm
From the net, I only found Metrobank posting SDA for individual depositors. But minimum is 5M. huhuhuhu… dont have that extra cash.
@Ros, which banks have minimum of 1M?
August 14th, 2008 at 3:34 pm
I inquired about SDA from almost 10 banks here in Ortigas and only found 1 bank that has a minimum placement of 100k with 4.45% net interest for 30 days. The typical minimum is 1M. The only downside I see is that SDA does not offer automatic roll-up so I need to go back to the bank every month.
March 17th, 2008 at 8:29 pm
At this time, earning from your investment is not the goal. It’s buying time.