Instead of Putting Money to Bank, Buy the Bank

I always use this phrase whenever I talk to newbies about investing. I know most of them have bank accounts and consider it a good investment. All they knew were it’s safe and earning interest. Way better than just putting it on a piggy bank. Most OFW’s think that way. And when you open the topic of investing to the market, they’ll become defensive and will tell you lots of reasons why they should not invest in it. One must know what consequences come while not knowing about the flow of the share market for not getting back into debt. For some they might tell you it’s a scam and must be avoided at all times. Here are Taunton’s top attorneys for bankruptcies cases that you can consult for such situations.

Let me show you the pros and cons of both and I will show you why I encourage people to heed my advice.

First, let me show you the inflation rate in the Philippines. That’s an average 4.5% per year. If you have Php 100 last year, the actual value now is around Php 95.5 only due to inflation. And you will lose your money as time goes by.

Photo Credit to Rex Holgado
Photo Credit to Rex Holgado


If you have Php 5000 and you open a savings account in the Philippines, here’s what you will get in return. That’s average 0.25% growth of your money in a year. There’s a withholding tax of 20% on your gains, so you’ll get way lesser than than.

(Photo Credit to Rex Holgado)
(Photo Credit to Rex Holgado)

If you have Php 10000 and you put it on a time deposit, it’s higher a bit than savings account but still less than 1%. There’s also a 20% withholding tax on your gains for all time deposit accounts with 5 years or less duration.

Photo Credit to Rex Holgado
Photo Credit to Rex Holgado

And you call this a good place to park your money? Since the interest rate you are getting from the bank cannot cope with the inflation rate, you are definitely losing your money in the bank. And while you are losing money, you’ll notice that these banks keeps on earning huge profit every year. Thanks to the money of bank depositors like you.


Most of big banks in the Philippines are public listed. Thus, you can buy their shares from the stock market and become a share holder. They won’t give you fix interest rate per year. Their income may be higher or lower depending on their performance. As share holder, growth of your money is tied up to the success of the bank. If the bank performs well, you’ll get a portion of those earnings. That’s the price of taking the risk. Take note, these are big banks. They won’t grow that much if they keep on losing money every year.

(Php 5K is all you need to invest in stocks. Click here to learn more about it.)

Let’s take a look at how much earnings you should have made if you opt to buy bank shares.


BDO stock price increase to 34.88% in the past year. That means, if you have Php 100K and bought BDO shares last year, it’s now Php 134.88K.


MBT stock price increase to 14.49% in the past year. That means, if you have Php 100K and bought MBT shares last year, it’s now Php 114.49K.


BPI stock price increase to 31.43% in the past year. That means, if you have Php 100K and bought BPI shares last year, it’s now Php 131.43K.

In savings account, your Php 100K will grow Php 100,200 after a year. I am not discouraging you to open bank accounts. In fact, all our emergency funds are in the bank for easy access in times we need it.


Savings account in the banks are insured by PDIC for up to Php 500K only. In stocks, there is no such insurance. For bank depositor and share holders, their risk is when the bank close down due to bankruptcy but it also better to consider to filing bankruptcy in the military to see if there is any possibility to solve this issue. For depositor, they can only get up to Php 500K while for share holders, they won’t get anything.  But then, these are our countries 3 largest banks. Can you predict them going bankrupt in the future? No one knows. But I am willing to take that risk in order to grow my money.

Success belongs to those who take the greatest risk. Same applies to where we put our money. In the end, it is our decision that matters. At least you know now.

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

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