PREFINALS FMAC224
Group 1. BANK ACCOUNT AND TRUST INVESTMENTS
BANK ACCOUNTS
 include a broad range of financial products such as credit
cards, prepaid cards, loans, and investments.
 But in the Philippines, bank accounts are usually associated
with deposit accounts that allow customers to keep their
money for saving or spending, manage funds, and perform a
variety of financial transactions (Zoleta, 2018).
 All deposit accounts in the country are insured with the
Philippine Deposit Insurance Corporation for up to PHP
500,000 per depositor per bank regardless of the number of
accounts a depositor has in the same bank.
TRUST INVESTMENTS
 It is an investment that is a public limited company that aims
to make money by investing in other companies.
 Owning shares in an investment trust is a way of investing in
a variety of different companies.
 also called close-ended trust.
 In most modern investment trusts, management has complete
discretion over the portfolio, subject to general charter
provisions.
TYPES OF BANK ACCOUNTS
1. CURRENT ACCOUNT
- It is an account meant for daily transactions and also
2. FIXED DEPOSIT ACCOUNT
known as demand deposit account.
- It is commonly used by entrepreneurs.
- Unlike other accounts, current account doesn’t earn any
interest but charges certain service charges, and
requires a higher minimum balance.
Privileges owners can enjoy:
a. Overdraft facility
Treatment of overdraft: bankers charge interest on
overdrafts on a day-to-day basis.
b. Other facilities – collection of cheques, transfer of
money, and rendering agency and general utility
services.
PROS and CONS
PROS:
- Easy and fast access to funds
- Charge free transfer of funds for bill payments
- Overdraft facilities
- A cheque book facility for cashless payments
CONS:
- No interest bearing
- Special services may incur heavy charges
- Lengthy paperwork and terms and conditions can be
confusing
- Huge fees due to corporate business transactions
- Limit on the amount of funds that can be withdrawn in a
day.
- Unlike other accounts where the owner can withdraw
their money anytime, fixed deposits account require the
investments or money to remain idle for a certain period
of time in exchange for a higher interest rate.
 - Also known as time deposit.
PROS:
- Safe and stable investment option
- Higher interest rate than regular savings account
- Can receive interest payouts
- Available in foreign currencies
- Fixed and guaranteed interest rate
- Can get higher earnings with a higher deposit and long-
term
- Simple to set-up and understand (certificate of deposit)
CONS:
- Funds are locked in for 30 days to 7 years
- Can’t place additional deposits
- You won’t have readily available cash for emergencies
- Penalize for early withdrawals
- No chance of earning higher within the lock-in period
3. RECURRING ACCOUNT
- The recurring deposit is usually abbreviated as an RD
account.
- The maturity value of the RD account involves the
amount deposited by the account holder and interest
compounded quarterly at a fixed rate.
- The types are regular recurring deposit account,
recurring deposit accounts for minors, recurring deposit
accounts for senior citizens.
REGULAR RECURRING DEPOSIT ACCOUNT
- The most common type, deposits are made for a
particular tenure and let you earn interest on the
principal amount.
- Interest is calculated either on single or compound.
- One can open an account if a person attained 18 years of
age.
- Lump sum can be withdrawn at the end of the tenure and
no additional deposit can be made in the ongoing tenure.
RECURRING DEPOSIT ACCOUTN FOR MINORS
- Accounts from those under 18 years old however need to
be under supervision of parents or guardian to open an
account.
- Commonly used to by parents to invest for education
expenses and other fees.
- Similar returns are made from regular recurring deposit
account.
RECURRING DEPOSIT ACCOUNT FOR SENIORS
- Can be availed by senior citizens and provides higher
interest rates than the regular.
- Interest is compounded on a quarterly basis.
- Additional interest rates made by the bank range from
0.50% to 0.75%.
PROS:
- Simple processing Expect higher rates
- Some banks offer flexible recurring accounts, and no
penalty if a person misses to deposit for a month. Also,
can withdraw the amount at any time.
- Excellent saving tools for short-term objectives
- Every good scheme for women and children.
CONS:
- You cannot change the amount you like to invest
monthly once decided
- You cannot withdraw the money any part of that
particular amount until tenure is over.
 - It is not possible in the case of recurring deposit to be
able to change your deposit amount, regardless of your
financial situation at the moment. With a fixed amount
for investment each month, someone with chances of
extra or less funds for the deposit should be discouraged
from opting for these products.
4. SAVINGS ACCOUNT
- An interest – bearing deposit account kept at a bank or
other financial institution. It is commonly used by
employed persons or those who have fixed income.
- It is the most common type of personal account used by
individuals to save money and earn interest.
- Withdrawals are permitted but are subject to some
restrictions.
- No overdraft facility.
- ATM cards, passbook saving account, net banking, and
mobile banking are available
- To keep a savings account active, a certain minimum
balance must be maintained.
PROS:
- A good option for emergency or short-term cash since
they generate interest while keeping your money easily
accessible.
- Promotes the practice of saving among those with fixed
income and salary earners.
- Enables the depositor to earn income by saving bank
interest.
CONS:
- Minimum Balance Requirements
- Low returns
- Withdrawal limitations
5. JOINT ACCOUNT
- An account shared by two or more people.
- It functions like a standard account, such as a checking
or savings account, and allows anyone named on the
account to access its funds.
- Business partners, associations, and couples commonly
use a joint account for convenience and transparency in
managing their shared income and expenses.
PROS:
- Transparent expenses
- Simpler legal process
- It makes it easier for owners of the account to pay bills
and other joint debts.
CONS:
- Less control over spending
- A partner’s debt could be an issue
- No privacy
- If your joint checking account goes into overdraft, you
are liable for a negative balance.
6. DOLLAR AND OTHER FOREIGN CURRENCY
ACCOUNT
- An interest-bearing US dollar account which requires the
use of a passbook to make deposits and withdrawals.
- Most foreign currency bank accounts in the Philippines
come with a passbook and are typically available in the
following currencies:
 Australian Dollar
 British Pound
 Canadian Dollar
 Chinese Yuan
  Euro PARTS OF CERTIFICATE
 Hong Kong Dollar
TIME DEPOSIT CERTIFICATE:
 Japanese Yen
 Singapore Dollar - Name of the Bank and Branch
 US Dollar - Time Deposit Certificate No.
- Account No.
7. NON-RESIDENT ACCOUNT - Name and Address of Depositor
- Also referred to as “offshore bank accounts”
- Type: Auto-Renew
- An account opened by an owner who is not a resident of
- Amount of Time Deposit
that territory or country. You can use this account to
- Term
hold money and send and receive payments.
- Opening Date
- Can be also used to set up savings and investments in
- Maturity Date
different currencies.
- Interest Rate
PROS: - Interest Payment Schedule
- Settlement Account No.
- Flexibility - those who need access to their money or to
- Signature of Bank Representative
international financing can do so more quickly and
easily with offshore accounts than would be possible - Signature of Depositor
with domestic arrangements. CERTIFICATE OF DEPOSIT
- Ability to manage foreign exchange in a convenient and
simple way - It is usually a one page document that certifies that you
- No need to close and re-open your account if you move have an account in that certain bank. Often, the latest
to another country. - available balance is indicated. But in some banks, you
- Financial benefits - offshore accounts typically offer can request that some details be included. Can be use as
higher interest rates and lower taxes than domestic a proof of funds and commonly needed during visa
accounts. applications.
- Ability to have access to international expertise and WAYS ON HOW TO EARN
investment advice
- Choose an account with high interest rate
CONS: - Open a recurring deposit
- Larger deposits - Take advantage of the rewards offered on debit cards
- Expensive costs - Know your purpose first before investing opening an
- Less protection account
WAYS ON HOW TO MAKE IT GROW
- Set saving goals
Setting financial goals will lead you to success,
stability and security.
- Try and open two or more savings accounts
A savings account is one of the safest ways to earn
interest on idle money.
Having multiple savings accounts could be a smart
move if you have very targeted financial goals. It
makes it easier to keep those goals separate and
prioritize how much and how often you save toward
them.
Aside from the fact that banks basically keep your
money safe, having a Savings Account helps you
keep your money insured (through PDIC). And your
money is not just passively stored in the bank; it
grows your money through interest rates. Depending
on the bank, your savings can grow from 0.125% to
4% per year.
GROUP 2. TREASURY BILLS
- are short-term secure investments issued by the
Philippine government through the Bureau of Treasury
(BTr).
- Treasury Bills are obligations with maturity of one year
or less, typically issued at a discount to the maturity
value.
- Treasury Bonds are obligations with maturities ranging
from 2 years to 25 years, typically issued at par with
periodic coupon payments to be made up to final
maturity.