Double-your-money investment schemes — are they for real?

James Ryan Jonas

Several rural banks in the Philippines are offering time deposits that pay as much as 20% interest per annum, effectively doubling your money after five years. Because these are time deposits, they are supposedly covered by the PDIC up to P250,000.

So does that make it a high-yield but virtually risk-free investment?

Let us know by posting your thoughts in the Rural banks offering 20% per annum thread in the PMT Forum.

Here's what a few PMT members have to say about double-your-money time deposit investment offers:


20% is really a good rate of return as long as the bank doesn't close and people are smart enough to invest only 250k per person as max PDIC insurance.

Bitster says:

I initially placed a Deposit of just Php100K, wanting to prove to myself that it did indeed pay 20/12% interest Month on Month.  I am happy to report this has been happening for over 2 years now.

I increased my 'investment' in such Time Deposits, with another Php150K 5 Year Time Deposit.

I was now at the limit of the PDIC Insurance.  Rural Banks DO get closed, so sticking to this limit so ones Deposits are fully covered by this 'insurance' is strongly advised.

Wynn says:

Please don't get me wrong here why i opted not to put my money in rural banks in pinas and choose to put it in a more known stable banks like PNB, Metro Bank and BPI although they offer that very low interest.  

First i'm not a resident there, that means also i seldom go back there and i don't have family, close relatives or children maybe to spread my deposits into 250k each to get covered by this pdic insurance which i believe give the most assurance to this type of investment and like what most of you here are doing.  

Anyway if you personally think this is viable option of investment do it but for me this is just not an option.  Convenience and long term safety and preservation of my capital is the only option for me.  Convenience on the sense that the bigger philippine banks have branches and offices internationally.  Safety i think i don't need to explain this further.

mykl says:

how sure are we that PDIC will pay up just in case something happens? do you have any documentation/certification from a PDIC officer that pertains specifically to these kinds of special accounts?

i agree that PDIC is the deciding factor for this product. this is the reason why i am requesting legacy agents here to produce or post a certification from PDIC. it's hard to rely on what is posted in their website and come up with our own interpretations. what if some 'fine print' that we are not aware of disqualifies products such as this from PDIC coverage? what do we do now?

tacamonchi says:

Now you have rural and thrifts banks that actually charge lending rates as high as 48% pa and simultaneously have access to cheap sources of funds as low as 8%, and we still find it difficult to believe that they can double our money in five years.

I do wholeheartedly agree that PDIC is first and foremost a safety net….and should not be counted as the first way out.  But it is still a reliable and strong net available to bank depositors which is not available to investors in stocks, bonds, mutual funds, uitfs, forex trading and all other investment vehicles.

Share your own opinion on these double-your-money investments in the following threads:

James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.