Inflation is the rise of prices for goods and services over time, which means your money can buy less than it used to. For example, a PHP 50 bill could have bought you a chicken and rice meal at a fast-food restaurant years ago, but now it can only get you some fries.
If your income or salary does not increase along with inflation, you may have to cut down on your expenses or be more careful with your spending. You may also lose money if you keep it at home or in a low-interest account, or if you invest in assets that have lower returns than the inflation rate.
To protect yourself from inflation, Metrobank shares some tips on how to manage and grow your money wisely:
- Invest in compound-interest-earning products. These financial instruments let you earn interest on both your principal and the accumulated interest from previous periods. This means your money grows faster than simple interest. One example is Unit Investment Trust Funds (UITF), pooled funds invested by professional fund managers in various high-yielding assets. UITFs do not have a fixed interest rate, but they can increase in value depending on the market and their assets. However, they also carry a risk of losing value when the market goes down, so you need to be patient and strategic with your investment. Metrobank offers a range of UITF products that suit different risk profiles, investment objectives, and time horizons. You can check them out at https://www.metrobank.com.ph/articles/uitf-products.
- Consider time deposits. These are accounts that earn a fixed interest rate for a certain period of time. The interest rate is usually higher than a regular savings account, but you have to keep your money in the account until the maturity date to get the full interest. The longer the term, the higher the interest rate. Time deposits are good for saving money for specific goals or emergencies. Metrobank has an Online Time Deposit product that lets you open an account with just PHP 10,000 and enjoy flexible terms from one month to one year. You can also earn up to 4.5% per annum* on your money. To open an Online Time Deposit, you need to have a Metrobank Online account and follow these steps:
- Open your Metrobank Online account.
- Click the ‘Open Time Deposit’ icon in your Dashboard.
- Fill out the needed details for your OTD placement, and click ‘Submit’ to proceed with your transaction.
Inflation is inevitable, but it doesn’t have to hurt your finances. With the right tools and services from Metrobank, you can make your money work harder for you and achieve your financial goals.
*Interest rate is subject to change without prior notice.