Are Time Deposits Covered By PDIC insurance?


Providing a fixed return on investment over a specified period time, time deposits are very stable and safe. Over time, they have been the preferred form of investment for most Filipinos.

Maybe it isn't a secret that depositor's money in bank accounts are insured at up to 500,000 pesos per investor. But does this insurance cover our money invested in time deposits? Perhaps because of the economic fallout brought about by the lock downs, some people have been feeling anxious about their investments in time deposits. Well, worry no more. Money invested in time deposits is also covered by the insurance provided by the PDIC.

But what about the time deposits in Unit Investment Trust Funds (UITFs)? If you have a UITF invested in money market instruments, chances are some of those funds are in time deposits of different banks. Since PDIC only insures 500,000 pesos per depositor, UITFs probably don't qualify since they handle billions of pesos.

Top 10 holdings of BDO PESO MONEY MARKET FUND as of June 30, 2020.

                                                                   Top 10 holdings of BPI INVEST SHORT TERM FUND as of June 30, 2020.

 Since UITFs themselves are not covered by the PDIC insurance, do investors lose money (in the form of the NAVPU going down significantly) if a bank that your UITF has a time deposit in closes?

In all fairness, these investments are classified as MODERATE risk. Although bank closures are not specified, both UITFs list down defaults from deposit liabilities, loans, bonds or other forms of security and debt instruments among its key risks.

BDO Peso Money Market Fund Key Risks

BPI Invest Short Term Fund Key Risks

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