Where Should You Invest Your Money: UITF vs Time Deposit?

Where Should You Invest Your Money: UITF vs Time Deposit?

If you’re a beginner at investing, you may be overwhelmed by the number of investment vehicles available to you. These financial instruments can also vary according to your risk appetite. Storing your money in a regular savings account doesn’t allow you to maximize its growth potential.

Thankfully there are low-risk investments like a time deposit or UITF that can help you grow your money at a higher rate at a reduced risk. Both these instruments are very different from one another. Learn more about it below:

What is a Time Deposit?

A time deposit is a financial instrument managed by banks. This type of financial instrument is kind of like loaning your money to the bank for them to use in their products like loans, but is a time deposit a good investment? If so, why?

Time deposits offer a stable growth platform for your money. Upon signing up for a time deposit, your bank promises to return your capital with interest. The rate of interest is given beforehand, so you know exactly how much to expect at the end of the contract. This financial instrument also allows you to harness the power of compounding interest.

For RCBC’s time deposit clients, we provide them with a higher interest rate for longer time periods.

Each bank’s time deposit product is different. They may have different investment periods and rates, although one thing is certain – each time deposit will be insured by the Philippine Deposit Insurance Commission. This guarantees that your capital will be safe even if the financial institution you’ve chosen has fallen into bankruptcy.

Although, it’s good to remember that once you’ve entered a contract with a bank, you’re stuck with the same interest rate until the end of this period. That means, if your time deposit product suddenly increased rates when you’ve already deposited your money, you won’t be able to reap these benefits.

Another thing is that the bank can charge you penalties if you withdraw your money earlier.

What is a UITF?

A Unit Investment Trust Fund or UITF is a type of investment instrument that hedge funds and banks run. These types of investments pool together different types of investments and allow the investors to purchase them per unit.

UITF products differ from one another depending on your risk appetite. Meaning that the higher the risk, the higher the possible returns. These products are usually a combination of stocks, bonds, equities, and money market securities.

However, due to the combination of investments that make up UITFs, its value is directly related to the market’s performance. So, if the market is low, your investment may not be performing well, risking your capital. This is why this type of investment instrument is better for long-term goals that can weather the market’s ups and downs.

Compared to time deposits, UITFs can be withdrawn any time after the initial holding period.

Much like time deposits, UITFs also have a minimum deposit amount. For example, RCBC’s UITFs have a minimum deposit of just Php 5,000 pesos. The minimum deposit amount can vary between financial institutions.

Which is Better: UITF vs Time Deposit?

Now that you’ve learned what is a UITF and a time deposit, you probably already have an idea of which one is better for your goals. You may have also figured out that the best investment vehicle is the one that meets your risk appetite, goals, and lifestyle.

To help you make your decision better, here’s a table that summarizes the differences between these products:



Time Deposit

Access to Funds

Can be withdrawn anytime after the holding period.

Can be penalized for withdrawals before the maturity date.


Not protected by PDIC

Protected by PDIC

Can grow beyond projections

Can yield higher returns if the market is performing well

Will still yield the same amount as the interest rate


Has low, medium, and high-risk products

Low risk

Securing Your Future With RCBC

If you want to grow holistically in your financial journey, it’s essential that you know when to invest in UITFs and in time deposits. Diversifying your portfolio is key to achieving your short, medium, and long-term goals, and reducing financial risks. This is a critical step in securing your future and recession-proofing it.

The variety of investment vehicles that RCBC provides makes it much easier for you to meet your goals in confidence.

Sign up with us today and secure your future.