Know your banking products

Most of us don’t even bother with those monthly updates we get from the bank. The savings we have scrimped and scraped over the last few years are safely tucked away in the bank. Safe, yes, but are we maximizing the potential of our money?

About the safest and most secure way of keeping our money in the bank is through the bank’s time deposit schemes. They are guaranteed by the bank, covered by a certificate, and even partly covered by the PDIC. The high yield placements, tied up with volatile commercial papers, the choice of which is dependent on your investment officer, are not guaranteed by the bank. As such, your investments are at great risk. My banker friend got out in the nick of time, but not without losing a small percentage of her capital investment, actually her husband’s retirement money. That was still lucky — some risk takers end up losing their whole investments entirely, and you can’t run after the bank because, if you read the fine print of the bank documents, it is clear that the bank does not extend its guarantees to such placements. And we are talking of well-established global banking institutes here, not just some rural bank or small savings bank.

Let’s take three banking institutions, factual examples, which are among the most respected in the country. Banks A and B are among the top three in the land, and Bank B has a subsidiary, a savings bank which is also among the top banks here. Spreading out your funds among the most secure and reputable banks is a good idea, precisely because of the limited insurance PDIC gives to the banking clients. However, your time deposits with Bank B, for example, will not yield as much as with their subsidiary because commercial banks’ interest rates are not quite as high as savings banks’ interest rates. They are, in fact, almost 50 percent less. For commercial banks, interest rates for medium-sized investments are at a low of 1.2500 percent per annum. For savings banks, the rate is double at 2.5000 percent per annum.

Also, there is a world of a difference when you go for the short term (32-35 days) versus the longer terms (six months, one year, two years, five years) I remember about two decades ago, PCI Bank offered an attractive package where you could double your money in five years. A similar scheme was adopted by BPI Family Savings Bank several years ago. They have since discarded the idea and just waited until the last maturity date of these deposits because the scheme was found to be unviable for the bank, but quite profitable for the clients. Now the scheme, I think, is down to 50 percent, meaning you can only realize interest gains representing half of your capital investments.

Bank A is another top commercial bank, just as reputable and secure as Bank B. Both banks’ interest rates are competitive, with Bank A just a few points higher, negligible if your deposits are not in the seven digit mark. But they have recently offered new banking products which are interesting. They now have one year, two-year and five-year placements with very good rates. As expected, the most popular and in demand term is the two-year one and the slots for this are always filled up. Interest rate for the two-year term is almost 50 percent higher than the savings bank rates, which is pretty good for a commercial bank.

Bank C is an international bank, one of the very few offering checking accounts for your dollar account. They also have the lowest interest rates in town for your deposits. For over two decades, we have been banking with them, and I was aghast that they were only offering one percent interest per annum. Last year, they sent out a circular announcing that they were bringing down the rates to 0.50 percent per annum. Half percent a year? It’s a ridiculous rate, especially considering that, if you use their credit card, you could get slapped with penalty charges of as much as three percent to four percent a month for late payment. This could really mean big bucks for credit card companies, not just this one, as credit card receivables in this country reached an unprecedented P99.6 billion last year, even higher than banks’ receivables.

Bank A, though they do not yet have dollar checking accounts, offers a much more viable product for your dollar placements. If you do not foresee spending your dollars in the next two years, they are offering a 3.375-percent interest rate that is guaranteed interest, if placed for a minimum of two years with their bank. Minimum amount acceptable for this scheme is $15,000, and the funds are securely tied up with their subsidiary bank in Hong Kong. The local bank, of course, guarantees in full this dollar placement.

What a world of difference between Bank A and Bank C.

So, know your banking products, and stick with reputable, conservative banks that will guarantee your investments.

A proud Pinoy and St. Luke’s too

Dr. Ma. Socorro Cruz Bernardino is one of the Ob-Gyne doctors at the prestigious St. Luke’s Hospital in Quezon City. Well, not just one of them, but THE ONE.

Dr. Bernardino, Cocoy to her friends, is the Philippines’ first Pediatric and Adolescent Gynecologist. She specializes in babies’ and teenagers’ gynecology problems, a niche previously unheard of and unfilled until recently. Teenagers can have serious problems in their reproductive system as well, regardless of their tender years, and these were previously referred to general OB-Gyns, lumped together with more mature mommies because no one specialized in pediatric gynecology before Cocoy did.

Today, she is St. Luke’s pride, having the distinction of being the first Asian Fellow in the International Federation of Pediatric and Adolescent Gynecology-Europe. It does seem that Cocoy revels in being a "first" in many facets of her professional career. Her mother, Amy Cruz Bernardino, was a medical student herself, until love and marriage beckoned. Her Dad, just recently deceased, was also a medical doctor.

She adds to the short list of "Proud Pinoys" that have decided to stay put and utilize the Lord’s blessings for her countrymen.

Mabuhay!!! Be proud to be a Filipino.

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