Short-term goals include saving for your upcoming wedding or a baby’s arrival and maybe for your dream travel abroad. If you need the money in three years or less, it’s best to invest in safer and liquid investments.
Liquid assets are those that are easy to buy and sell, such as time deposits and money market funds, which make your money grow through set interest rates and maturity dates.
On the contrary, a house is an illiquid investment because it can take months or even years to sell.
If you need your money in less than three years, don’t go into risky investments such as the stock market. This will not give you enough time to recover your losses if you enter the market at its peak and then it crashes. You may end up losing your hard-earned money.
Time Deposit
Time deposits are among the best short-term investments for people who are afraid of risks yet want to earn higher interest than a traditional savings account. Most savings accounts have interest rates of less than 1%, while time deposits earn up to more than 4%.
Let’s say you put PHP 100,000 in a time deposit account with an interest rate of 3.70% per annum. After a year, you’ll get PHP 103,700.
Money Market Funds
These are ideal for newbie and conservative investors who want to earn a little higher than time deposits. Money market funds are the best short-term investments for capital preservation in one year or less. They’re invested in corporate bonds, government treasury bills, and other risk-free, short-term securities.
Short-Term Corporate Bond Funds
Corporate bonds are generally safe, consideringthese are issued by corporations with high prospects of revenue or profitability.
Bond funds are a collection of corporate bonds from different companies under various industries and pay interest, usually on a monthly basis.
However, short-term corporate bond funds are not insured, so you can still lose money. Still, the diversified investment nature of the bond funds makes them a safe and good investment in the Philippines.
High Yield Savings Accounts
If you want to set aside your money for a while, then open a high yield savings account and allow it to earn while it sitsin the bank. Not only will it help you safely keep your money and avoid unplanned purchases, but it can also earn up to 4% interest per annum.
A high-yield savings account is perfect for conservative investors who can do with little profit in exchange for the lowest investment risk possible.
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GInvest
GInvest is an investment platform accessible to all GCash users who wish to invest with GCash partners. ATRAM Trust Corporation is a GInvest partner that manages performing funds in the country.
ATRAM Trust Corporation (ATRAM Trust) manages some of the best-performing funds in the Philippines. ATRAM Trust is the first stand-alone trust corporation in the Philippines. It received its license to operate in October 2016 from theBangko Sentral ng Pilipinas (BSP). ATRAM Trust provides and manages the funds available in GCash Invest Money. You can learn more about ATRAM Trust on their website (http://www.atram.com.ph)
Certificate of Deposits
Certificates of Deposits (CDs) are a form of time deposits that let you hold the money in your account for a specific period ranging from weeks to years. You can open a CD account and choose your preferred maturity. The longer your money stays with the bank, the higher yields you can earn.
Upon reaching your CDs’ maturity, the bank will release your money along with the interests earned. Although CDs are less liquid compared to savings accounts and other bank investments, these are considered safe because CDs are insured by the PDIC.
