How to invest in SDA – Special Deposit Accounts

What alternatives do you have if you have extra money which you won’t need in the near future and which you want to place in a safe investment?

Well, the easiest choice is to put it in a bank’s savings account. A savings account is highly liquid — meaning you can withdraw your money anytime you want. It is also safe because deposits up to P250,000 are covered by the Philippine Deposit Insurance Corporation.

If you want higher interest rate than a savings account, you may opt for a time deposit. Here you park your money for a certain period of time and, in return, the bank offers you an interest rate relatively higher than what your regular savings account will get. Like a savings account, time deposits are covered by the PDIC up to P250,000 per depositor.

Now, what if you still want a higher interest rate but are not willing to take additional risk? That’s when you can try investing in Special Deposit Accounts or SDAs.

What are Special Deposit Accounts (SDA)?

SDAs are short-term placements offered by the Bangko Sentral ng Pilipinas (BSP) to local banks. It is a mechanism used by the BSP to manage liquidity in the market. Since these placements are backed by the country’s central bank, SDAs are considered a safe and virtually risk-free investment. SDAs have short-term maturities, usually within a month.

How to invest in SDAs?

Visit a branch of your bank and inquire how you can make an SDA placement. Most of the branch staff know about its existence but in case they don’t have any idea, contact directly the Trust and Investment Management Division of the bank.

Normally, the only things required of you are your IDs, the application form which the bank will provide, an account with the bank that will serve as your settlement account, and your investment money, of course.

What is the minimum amount needed to invest in SDAs?

This varies per bank, so it’s better to ask them directly.

Based on what we know, the minimum amount needed to make an SDA placement in Banco de oro (BDO), Security Bank and Hong Kong and Shanghai Bank (HSBC) is P1 million.

In Chinabank, the minimum is P5 million.

In UnionBank, P10 million.

The lowest we know is Bank of the Philippine Islands (BPI) where the minimum is P100,000.

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28 thoughts on “How to invest in SDA – Special Deposit Accounts”

  1. Hi – regarding James’ comment above, what does BFB stand for? Pls confirm the net of 4.4375% is not subject to withholding tax. Thanks.

  2. @Feliciano, BFB is BPI Family Savings Bank. To check the actual net interest rates, better contact the bank you want to make an SDA placement with so you can also ask what other fees or taxes, if any, they deduct from your gross earnings.

  3. Hi,
    What is the minimum amount accepted by BFB? and I am not really familiar with the SDA, can somebody care to enlighten me thru a sample computation, say, 200k @ 3.25% (14 days or 30 days), how much would the earning be at the end of the term?

  4. Hi Jing, I think it’s also P100,000 but better check with a BPI Family Bank branch to confirm. To compute your interest, assuming you placed P200k and the net interest rate is 3.25%, at 30 days, the interest you will earn is 200k * 3.25% * (30/365 days) = P534.25.

  5. Hi James, thanks for the reply. Hmmm, quite small pala no, even for a 500k. SO what’s the diff compared sa Time Deposit or Regular Savings Deposit? I am clueless, really.

  6. Hi Jing, with time deposits and savings accounts, the money you give goes to the bank which they use to lend to other people or to invest so they can also earn money from it. If you invest in SDAs, on the other hand, the money does not go to the bank but rather to the BSP which pays the bank interest for “depositing” this money with them. The bank simply gets a cut from the interest rate it receives from the BSP and then the rest is given to you as interest for your SDA investment. Hope that clears it up!

  7. hi james.
    lets say i have a million box and i use to put in sda. can you give me agood computation for 1ml. to 3.25% (1yr). salamat po

  8. hi, could anyone tell me? after maturity date, can you withdraw from the principal amt you deposited (not compromising naman the minimum amt). lets say, you deposited 200k and minimum is 100k. after maturity, you withdraw 50k. is this allowed?

  9. More thought has to go into investments than in previous years. Ensuring that you are able to sell your stocks when you want to sell them will also affect the return that you receive. For a conservative investor, these are great examples of where to invest your money.

  10. For those who are more aggressive and would want to maximize the potential returns of their money, an alternative investment would be the just recently offered one time single pay Variable life insurance product (VUL) of Sun Life Financial, the SUN MAXILINK ONE. Minimum investment is Php 500,000.00, and as much as possible, client should be willing to remain invested for a minimum of 5 years to avoid paying any premium charges. Thereby, maximizing every peso invested into buying more shares or units into your investment fund.

    Current historical average annual compounded return (from 31-Dec-2004 to 31-Dec -2010) of Sunlife’s VUL Balanced Fund and Equity Fund is an impressive 14.39% and 17.08% respectively!  That pretty much offsets your risk for taking a non-guaranteed return vs a guaranteed bank time deposit whose interest is below the average inflation rate anyway.  Saan ka pa?!  di sa Sun na!

    The best part is that the newly launched Maxilink One investment funds, namely Growth Fund (Equity), Opportunity Fund (balanced fund), and Income Fund (Bond Fund) are all being offered now at offering price of 1 Peso per unit/share.  Taking into consideration the impressive performance of the MyFuture Funds launched by Sunlife in 2008 at the initial offering of Php1.00 per unit/share, they average an staggering 33% less than 3 years as of 31 Dec 2010.  That is net of tax, btw.   This is the beauty of by-passing the bank by investing your money where the bank invest your time deposits…. simply by hiring Sunlife to be your fund manager. 

    If you’re interested to have a proposal, you may contact me at or thonycoors7   You may also contact me at +63922-8803858.   

  11. If you aint goit the cash. dont invest in the money market.
    word of advice. if you invest in this area, you must have a reserve that will counteract just in case you are at lost. otherwise you will lose your cash and wont be able to get it back.
    kaya po pinagaaralan ko lahat ng bahay bago ko ito pasukin. sarap kasi po ng laro na ito.
    pati langis, sarap laruin po ng commodities market lalo na kapag alam mo.

    • Contact: for more details

      Projected Fund Values(@ age 65)*4.00%7.52%10.00%PhP 1,000,000PhP 1,250,000PhP 3,927,563PhP 12,578,218PhP 27,956,478PhP 1,500,000PhP 1,875,000PhP 5,891,345PhP 18,867,328PhP 41,934,717PhP 2,000,000PhP 2,500,000PhP 7,855,127PhP 25,156,437PhP55,912,956

      *The illustrations above are based on an insured age 30, male, and are invested 100% in PruLink Bond Fund.

      Investment returns used are net of final tax, Annual Management Charge, and other investment expenses.

      The values are based on the projected performance of the fund where your policy is linked. Because fund performance is not guaranteed, the values are also not guaranteed. In addition, the assumed investment returns used in projecting the Low, Current, and High values represent a range of possible returns that may be achieved by the fund. The High and Low assumptions are only for illustration purposes and do not represent the upper and lower limit of the actual investment that may occur.

      The High and Low investment returns, at 10% and 4%, are those prescribed by the Insurance Commission. The illustrated Current investment return is based on the actual average investment return experienced by the Fund in the last 36 months, as indicated in the Historical Unit Fund Performance page, except that if the average exceeds 10%, the illustrated investment return is capped at 10%.

  12. sa bpi pag nag lagay ba ng 100k magkanu tutubuin nun monthly? pag ba sa loob ng isang taon gusto ko na i withraw pwede ba un?

  13. You’ve shared the ideal collection ever. “Sleek Minimal PSD Website” is genuinely an incredible PSD.


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