Opening Your First Time Deposit Account? Here Are 6 Things to Remember

If you’re looking for a safe and reliable way to make your money work harder for you, time deposit accounts are a tried-and-true option. They typically offer higher interest rates compared to regular savings accounts, allowing your money to grow more over a fixed period. Additionally, by locking in your funds for a set term, time deposit accounts encourage disciplined saving. This setup helps you stay focused on your financial goals without the temptation to dip into your funds early.

That said, while the advantages of time deposit accounts are clear, it’s important for first-time investors to fully understand how these accounts work before opening one. Knowing the terms, conditions, and any possible restrictions can help you avoid surprises and ensure your investment aligns with your financial plan. To help you make the best choice, here are some key things to keep in mind before opening your first time deposit account, like a Maya Time Deposit Plus account:

1) Recognize That Time Deposits Lock Your Money for a Fixed Term

When you open a time deposit account, you agree to keep your money with the bank for a specific period. This could be a few months or several years, depending on what term you choose. During this time, your funds are essentially “locked in,” meaning you won’t be able to withdraw the money freely without facing fees.

Generally, the longer the term, the higher the interest rate you can earn upon the time deposit’s maturity. However, since your money will be tied up for that period, it’s important to choose a term that aligns with your financial plans. You don’t want to commit funds you might need soon, as doing so could lead to early withdrawal penalties or missed opportunities elsewhere.

2) Be Prepared for Penalties if You Withdraw Early

One essential thing to keep in mind is that withdrawing your money before the term ends usually results in penalties. These can include early withdrawal or cancellation fees, which may reduce or even completely wipe out the interest you’ve earned.

Being aware of these penalties upfront will help you avoid surprises later on. Ideally, you should only invest money you’re confident you won’t need to touch until the term is over. This way, you can fully benefit from the higher interest rates time deposits offer.

3) Compare Interest Rates and How Interest is Compounded

Interest rates on time deposits can vary significantly between banks and also depend on the term length and the amount you deposit. In addition to the rate itself, pay attention to how often the interest is compounded, whether daily, monthly, or quarterly. The more frequent the compounding, the faster your money can grow.

Comparing interest rates and compounding schedules across different banks before opening an account can make a meaningful difference in your earnings. Some banks also offer special promotions or bonuses for new customers, so be sure to watch for these deals to help you maximize your returns.

4) Check the Minimum Deposit Required to Open an Account

Banks usually require a minimum amount to open a time deposit, and this minimum can vary quite a bit. Some banks may ask for just a few thousand pesos, while others might require much more.

Before opening an account, make sure you know the minimum deposit required so you don’t get caught off guard. If you don’t have enough to meet the bank’s minimum, you can either save a bit longer or look for a bank with a lower requirement. Digital banks can be a good option here, as they often have lower minimum deposits and more flexible account opening processes compared to traditional banks.

5) Know What Happens When Your Deposit Matures

When your time deposit reaches its maturity date, most banks will automatically renew it for the same term at the current interest rate unless you instruct them otherwise. This process is called an automatic rollover. Meanwhile, some banks may transfer your funds automatically to your savings account upon maturity.


If you’re not aware of these automatic actions, your money might get tied up longer than you intended, or you could end up with a different interest rate than expected. To avoid surprises, mark your maturity date on your calendar and decide in advance whether you want to withdraw, reinvest, or move your money elsewhere.

6) Verify That Your Deposit is Covered by Insurance

It’s also wise to ensure your time deposit is protected by a reliable insurance program to safeguard your money in case the bank encounters financial difficulties. In the Philippines, time deposits are insured by the Philippine Deposit Insurance Corporation (PDIC). This insurance protects deposits up to PHP 1 million per depositor.

Knowing your money is backed by this insurance provides added peace of mind. Before opening an account, it’s a good idea to confirm that your chosen bank is a member of the PDIC and regulated by the Bangko Sentral ng Pilipinas to ensure your funds are secure and properly protected.

Indeed, opening your first time deposit account will be a smart step toward growing your savings with greater security and higher returns. Keep these important reminders in mind to avoid common pitfalls and make confident decisions that suit your financial aspirations. With the right knowledge, your time deposit can be a valuable tool in helping you reach your long-term financial goals.