BRIGHTER LIFE (/BRANDRAP/BRIGHTER-LIFE)

Which is better? Time deposit or

mutual fund?
Which long-term investment should you choose? Here's a useful guide

Krista Garcia
Published 7:31 AM, Oct 01, 2014
Updated 11:36 AM, Oct 14, 2014

MANILA, Philippines We Filipinos have a common notion when it comes to saving money: keep
it in a savings or time deposit account. We usually set aside a portion of our incomet, just let it sit
there, and access the money when we need it.
Putting our money in time deposits gives us a sense of security, knowing that there's a fund that
we can dip into for household needs and emergencies. But should we be happy and content with
the interest that we're getting from our time (/)
deposit account?

If we want to grow our money, we need to complement it with a long-term financial instrument
such as mutual funds. These could boost our moneys value and help address long-term goals
(usually 3 years or more) such as funding for retirement, education, a dream vacation or even a
business idea.

This is where the practice of diversifying comes in. We can have our time deposit account for
immediate or short-term needs (usually 6 months to 1 year), and we can have another basket
taking care of our money for the future.
The latter not only ensures that our moneys value is growing at a good rate; it also helps us
combat inflation, or the general increase in prices of commodities and services.
A lot of us keep our money in a time deposit because it's "safe." The amount that we put in
remains intact and the interest is guaranteed. Think again. There's a silent thief
(http://www.rappler.com/brandrap/sun-life-financial/60723-inflation-silent-thief) called inflation that
slowly depletes the value of money over time. So if a time deposit gives 1% annual interest and
the inflation rate is 3%* this means that the real value of money actually shrinks by 2%.
If were looking to beat inflation and at the same time be financially prepared for the future, then
its high time to re-allocate a portion of savings or time deposit to invest in mutual funds.
So which is better between the two? The answer is we need both - time deposits for immediate
expenses and short-term needs; and mutual funds for long-term goals. Each has a different
objective and time frame.
Heres a useful guide on the difference between time deposits and mutual funds. Rappler.com

(http://facebook.com/sunlifeph)

* 2013 full-year inflation based on NSO data

To know how Sun Life (http://sunlife.com.ph/) can help you achieve a brighter life, visit
www.brighterlife.com.ph

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27 Comments

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Jonn Marvy Santamaria

25 days ago

I feel that mutual funds are risky. Is my money secured even thou the profit isnt? I want to know that. I can do with mutual
funds as long as i know my moneys isnt going anywhere, coz most insurers go bankrupt after few years. Aaaaand your
moneys is gone. Unlike when its on a bank even if the bank fails your money is ensured by up to 500k.
Reply Share 8 replies
Donigot Ursal

+5
23 days ago

To me this is a no-brainer.:-) Mutual Funds is way way better than Time-deposits.

Infl
ation is higher that the yields your money will earn if it's in a TD.
In mutual funds, your investment portfolio will be your guide where to put your money.
Example: If you are risk-averse, then put your investment in Bond funds.
If you have a strong risk-appetite, then put your money in equity.
If you are half of the other and half of the other one, then put it in Balance.
Time Deposits, limit your option. Truth is, it doesn't give you any.
Mutual Funds can help your money maximize its earning potential to the fullest or at its most prudent level, depending on
the investment profile of the investor.
So which is which? No-brainer,d:-) This is like comparing apples to guavas. MF is the apple.

Reply Share 1 reply

Marissa Neri Mangitngit

+1
4 days ago

does it cover V.U.L OR UNIVERSAL VARIABLE LIFE???

Reply Share
CHANGED HEART

0
6 days ago

John MS there are two trusted providers/companies now in the market with long years of experience in handling financial
investments - SUN Life Financial and PRU-LIFE UK. Banks as experienced here in the Philippines and anywhere are risky
solutions for your money - they get bankrupt and you get nothing out of your money. Yes deposits are insured up to 500K
but you have to fight nail and tooth in legal battles or delays before you get your money. Ask those people whose banks
went bankrupt-they lost their sweat and blood to dirty businessmen. And yes any investment is risky - the higher the gains,
the higher the risks. Similarly in LIFE and in LOVE - you will not get the best without pains and sacrifices
Reply Share

Ting Enriquez

7 days ago

Time Deposit ! You can lose your money on mutual funds! Finance companies play with your money and get commissions!
Reply Share 1 reply

Jose Asuncion

7 days ago

I have invested in ETFs instead of mutual funds because of the higher management fees of the latter.
Reply Share

Juls Terobias

8 days ago

To be secured have them both. Problem?

Reply Share

Rebecca Ferry

8 days ago

me too, when you say that returns are not guarantee is actually risky, i still prefer to put my money on a time deposit, i
know the return is not actually big but it's safe that i can withraw it when i need it.
Reply Share 2 replies

Jude Soronio

8 days ago

i would rather earn money from a non-traditional method called... "WORKING"...

Reply Share 2 replies

Miguel Hernandez

8 days ago

inflation is at 4.4%
Reply Share

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