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Do You Think Putting Money in the Bank Makes You a Saver?

Do You Think Putting Money in the Bank Makes You a Saver?

Most Filipinos believe that putting money in the bank is the best decision they can make. And for that, they will call themselves SAVERS. In general, bank offers a safe place to hold your money and give you a little interest in return. And for that, we are thankful for them.

However, I have a different point of view. By putting money in the bank, you are actually losing your money in the long process. Will you call them saver if they are losing money? I call them LOSERS instead.

Here’s the 3 of the biggest bank in the Philippines with their respective programs and interest rate annually.

philippine bank interest rate

With the small interest rate in mind, we thought that we have the best value for our money. That’s what all the banker’s will say to us. However, they will not tell you one of the most important factor with respect to money: inflation.

According to DTI website, below is the year on year inflation rate in the Philippines from 2007 to early 2012.

inflation rate in the philippines

Inflation rate is around 4% compare to 0.25% that the bank is giving you for your deposit. In the end, you are LOSING 3.75% of your money yearly.

 If you do save, make sure you outpace the current inflation rate to grow and preserve your money well.

While it is clear that bank depositors are losing money, did you know what happen to the bank? Here’s the 3 years screenshot of their stock prices.

PNB 3 yr stocks chart

From stock price of around Php 24 in 2010, their stock price is now Php 90.

MBT 3 yr stocks chart

From stock price of around Php 44 in 2010, their stock price is now Php 107.

BDO 3 yr stocks chart

From stock price of around Php 31 in 2010, their stock price is now Php 75.

In 3 years, all their stocks prices are almost doubled or tripled. Banks are getting richer and richer at the expense of uninformed bank depositors.

So my advice: Instead of putting money in the bank(deposits), why don’t you buy the bank(stocks).

Check my post on how to invest in stocks with as little as Php 5K.

P.S. A year ago, I do not know anything about investment. Then I joined Truly Rich Club by Bo Sanchez. It was the best decision I ever made in my life. Brother Bo is a spiritual preacher and at the same time, financial literacy advocate whose purpose is to help people become rich in order to serve the LORD with the money that they have. He guided me along the way, explaining how I can manage my money and make it work hard for me. Now I’m investing in stocks and mutual funds and have a clear path for my future. Soon I’ll open UITF account as well. All are made possible by his guidance and teachings on every steps to become an investor. Being OFW isn’t forever, this is my EXIT PLAN. It’s amazing how his teachings change my life. I’m inviting you to join the club too, JOIN TRULY RICH CLUB. If you have any question, feel free to leave your comment below. CLICK HERE TO JOIN

About Richard Macalintal

Hi my name is Richard. I am a Registered Financial Services Consultant in Singapore. If you have any queries or you need help on your insurance policies and investment linked products, feel free to message me :-) We can have a cup of coffee while I do financial review and give advice with regards to your finances :-) Contact me thru email rlmacalintal(at)yahoo.com or SMS me +65 82235186. Disclosure: I am a Financial Consultant of AIA. The statements or opinions expressed on this site are my own and do not necessarily represent those of AIA.

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