Grow your money just by starting small

Savings can be rewarding if you know where to put your hard-earned money.  While coin banks are a good way to reinforce the value of saving, the truth is, your money simply sits there. Here are a few options to make your money work for you.

Open a savings account
Banks are the obvious choice to keep your cash secure. As long as you maintain the required balance for the account, this is a risk-averse way to save and grow your money. Banks may offer varying interest rates for savings accounts, so it may be best to choose the one that offers the best deal. These accounts, however, may offer limited growth for your savings.

Join a cooperative (co-op)
Being part of a cooperative means you and your fellow members democratically own, control, and grow a business together. Cooperatives, whether small or large-scale, are afforded more opportunities in the market because the costs and risks are shared by the members. Members earn their share of profits through patronage dividends and the amount of equity they have contributed into the cooperative. It is best to look into cooperatives that have proven track records and go into profitable businesses.

Buy variable universal life insurance (VUL)
Unlike traditional insurance plans, a VUL is an insurance plan that doubles as an investment. A percentage of a VUL plan functions similarly to a mutual fund. So aside from the usual benefits of insurance plans, VULs help you earn profits from the money you put in every contribution.

Save via the Modified Pag-IBIG II Program (MP2)
Members of Pag-IBIG Fund are entitled not just to housing and salary loans.  They can also save in the Modified Pag-IBIG II (MP2) Program, a voluntary savings program offered to members who want a bigger return on their hard-earned money.   This program has a five-year holding period with options to renew at the end of each term. Its return on savings is higher than most banks’ savings and time deposit accounts.

For just P500 monthly savings for a period of five years, money can earn a dividend of P5,776.68, tax-free.  A lump sum savings of P60,000 can yield P11,997.95 in dividends tax-free at the end of the five-year term.  The average MP2 dividend rate is at 6.96% according to the Pag-IBIG website. In 2017, the MP2 dividend rate was at its highest ever at 8.11%.  Dividends are derived from 70% of Pag-IBIG fund’s annual net income, the website said.

The Pag-IBIG MP2 Savings program also has no limits.  Active members and retirees can maintain as many savings accounts as they want.  After the holding period, they may claim their savings plus interest.  They can also opt to renew for another five years.

This savings is safer than any bank’s Unit Investment Trust Funds (UITF).  Money invested in UITF may risk losing its value over time.  The returns depend highly on the current market rate and can either be higher or lower than what you have invested.  With Pag-IBIG Fund, your principal savings is safe whether the performance Pag-IBIG is good or otherwise. 

Interested Pag-IBIG Fund members may proceed to the nearest Pag-IBIG branch.  Just download and complete the MP2 application form via https://pagibigfund.gov.ph.  Submit it along with all the other requirements to apply.  You can also apply online via Pag-IBIG website.  Just click on “E-service” and “MP2 Enrollment system.”  Enter all information including the CAPTCHA code and click “Submit My Application.”

For more information about Pag-IBIG MP2 Program, visit their Facebook page.