Are bank deposits still the WISEST investment these days?

Philippines
August 14, 2009 9:42pm CST
This question came to me just recently. When you grow old, you think about the future. We all know we need to save for our retirement if we don't want to become miserable in our old age. But what do you think really would be a very wise investment? A friend once suggested that opening a bank account and depositing some thousand pesos/dollars (whichever I can afford) on it and forget about it in ten years would be a wise investment. In no time, I would not notice It earned a lot on interests which would suffice my daily expenditures in the future. That makes sense, isn't it? Others suggested, I put my money in the stock market. But what the hell do I know about "stock market"? That word is extremely foreign and jargon to me. I don't consider that idea an option. I once invested in pyramiding and put money on it but it didn't work for me. They earned, but not me. I still can count my loses. I listened to the tape of the famous "Rich dad, Poor Dad" and it talked about things I don't really understand. Maybe I just wasn't born for stock market, real state or something related to these terms. My parents sent me to school to earn a degree to have a decent job which I did eventually. The school didn't teach us much about investments, did they? I am no economist. I am trying to understand how economy works and how investments work but self-help books just won't suffice. They tell may different stories, none of them is a sure answer to my question. So, do you have any idea about a wise investment for your "honest, hard-earned money"? I need help on this. Can you suggest anything?
4 responses
• Philippines
18 Aug 09
i'm not an economist either and i can't claim to having made wise decisions when it comes to financial matters. i'm still learning and learning some more. hehe i'm not sure if regular bank deposits is the safest and wisest investment. come to think of it, whatever we saved and deposited to the bank... it will just earn us less than 1% per year, as can be witnessed in the philippine scenario. so imagine how much your bank deposits should be and for how many years you need to forget about it just so it could feed you upon your retirement age. -lol- (plus point: accessibility. negative point: bank deposit insurance have a ceiling.) some commercial banks offer great deals on fixed deposit rates and investment schemes but starting amount is pretty high and not for the low to middle-income earners. investments on treasury bonds is a bit higher but the investment period, i heard is longer. (plus point: earns you higher than regular savings. negative point: inaccessibility for a period of time.) before, when i was working with an international ngo project for strengthening financial institutions in the country, we focused on credit unions or locally known as coops. i had a very good experience that made me patronize their products. imagine, my regular savings can earn me between 4%-6% interest rate per annum; time deposits earn me 8%-10% per annum and share deposits (just based on one coop that i have tried) earned me 30% per annum. it was just a small investment because i just wanted to try the difference that we have provided, and the impact of our project to their institution. (plus point: earnings you can appreciate. negative point: regional, coops not operating nationwide.) good returns may involve higher risks. so it's up to us how much we want to earn, at what risk we can afford and up to how long we can be patient. just a balance of things. we can be passive or agressive about it. some would invest on assets that would appreciate over time like real estate. while some, re-invest in business. whatever we decide to do, just do a bit of research first and test the waters. never put all your eggs in one basket. so what i do is dab on little bits here and there... in time, i'd know which one will earn me the most at the level of risk i'm comfortable with. i don't have an inkling about the stock market and i don't wish to learn at this stage. i'm more comfortable in stuff that i know and have experience with. unlike the stock market which is as volatile as the economy and as highly dependent on what's happening in other countries.
• Philippines
20 Aug 09
I was overwhelmed by the information you have shared on this page. I still could not ingest them. Hahaha. I thought economy was difficult, I was wrong. It was in fact, awful! =) When you mentioned the percentage per annum that I can earn form my hard-earned money, I thought it was too little. When I grabbed a calculator and tried to have a ballpark or estimated figure, I became weak in disappointment. It was indeed a little penny. But anyway, having these told, I am still perplexed on where to put my money for investment. Maybe I'll figure that out later. Thanks so much! =)
• Philippines
20 Aug 09
-lol- i didn't mean to discourage you. i'm so sorry. i'm just stating a few facts. hehehe most commercial banks will give depositors a regular savings interest rate of 0.5% - 1% per annum less tax (which is 20% of interest amount). it is so low that many microentrepreneurs would rather re-invest the bulk of their hard-earned peso to their business than save in the bank. savings is a good investment if you just want a nest egg or something or a safe place to stash away your extra money. but it will not earn you a considerable income over time.
• Philippines
3 Aug 11
bank deposits are not a wise investment. I believe that investing should be easy and fun. Like you, i thought that investing in stock market is really scary and not for ordinary people. Until i found a book by Bo Sanchez "My maid invests in stock market and why you should too." It is very informative book, very simple and easy to understand. I follow the instruction step by step and now i am stock market investor and it felt awesome. You can read or download the ebook by copying and pasting the url below to your browser. http://www.citiseconline.com/loj/MyMaidInvest_ebook.pdf
15 Aug 09
I believe that there are better investments than putting your money in the bank such as saving bonds or stocks. However, bank deposits are the safest investments, even though you get a low interest rate, as you are insured up to a certain amount. It also gives you the freedom to withdraw your money anytime you please unlike savings bonds where you have to wait a couple years or stocks, which you have to wait for the investment to gain profit.
• Philippines
17 Aug 09
HI, Could you tell me more about saving bonds and stocks? How do these work? Did you personally engage to saving bonds or investing to stock market? I am definitely clueless how they work so I believe you could tell me something. -)
• Philippines
28 Dec 09
I think that time deposits are better than savings account.time deposits yield higher interests than plain savings account.just make sure that the money isn't what you will be needing for the next 12 months or 5 years.if you are starting to learn how investment goes,a reputable bank can help you understand more how time deposit goes.choose a bank that has good reputation and has stable financial record.