Special Deposit Account

Lots of people are still unfamiliar about BSP Special Deposit Account. I, myself wasn’t apprised much about it. I bump about it one day when I am inquiring about the performance of my UITF investments with BPI. It was offered to me by the Trust Officer and I immediately solicited for further explanation about it.

BSP SDA is a good investment for conservative investors looking for better returns compared to savings account and time deposit.

As of October 19, 2012, the interest rate for 7 days tenor is 3.7813% per annum. For 14 days tenor, the interest rate is 3.8438% while 30 days tenor is at 3.9063%. These are gross interests since your bank will charge you the trust fee plus the 20% withholding tax.

BSP SDA is also a very good investment for your emergency fund since it is safe and highly liquid. Although account pre-termination is prohibited, you can withdraw your money within a short period of time since the given tenors are very short at 7 days, 14 days or 30 days periods.

In case you need to withdraw your money, just inform your bank at least three days prior to the maturity of your SDA investment and it will be credited to your settlement account.

WHAT IS BSP Special Deposit Account?

BSP Special Deposit Account is an investment with Banko Sentral ng Pilipinas. It is a monetary policy formulated by the BSP for the purpose of managing excess domestic liquidity in the financial market.

Through the implementation of Monetary Resolution Nos. 433 and 518 on 2007, BSP opened access to the SDA facility, banks and non-bank financial institutions involved in the trust business.

Through Memorandum Nos. M-2007-011 and M-2007-038, implementing guidelines were issued by the BSP later on the same year.

The minimum investment for the SDA from banks and trust firms is P10 million with the additional amounts in increments of P1 million. The bank pooled the investments from the individual investors together to reach at least the minimum amount.

HOW TO INVEST IN BSP SDA?

You can place your investments through the different banks which offer this kind of investment.

Among these banks are China Banking Corporation, BDO Unibank, Inc., Philippine National Bank, Metropolitan Bank and Trust Company , Allied Banking Corporation,  Hongkong and Shanghai Banking Corporation and Bank of Philippine Islands.

Most of these banks, however, accepts a minimum investment of P1 million pesos except BPI which accepts P50,000.00 *P500,000.00 as the minimum investment.

To invest with BPI, you must have a BPI deposit account. In case you don’t have your BPI deposit account yet, you can open an ATM account at a minimum amount of P3,000 pesos. This account will be your settlement account for your Special Deposit Account with BPI. BPI calls this as BPI Trust SDA.

To open your BPI Trust SDA, you need to bring 2 pcs. of your 1 x 1 colored picture and 2 valid IDs. Present these to the Trust Officer of your BPI branch and tell him your intention to invest in the BPI Trust SDA.

The Trust officer will ask you to fill out the Investment Account Application form for your SDA investment. You will be ask also to fill out the Client Suitability Assessment Form. This  will give the bank the perspective about your understanding of the risks related to investment.

Finally, you will be ask to sign the Risk Disclosure Statement Form. Signing this form means you understand fully and clearly the nature of investments and the risks involved in your investment.

To place your SDA investment, you need to deposit your investment money into your BPI deposit account. BPI will transfer this amount into your BPI Trust Special Deposit Account.

To have your BPI Trust SDA to be automatically invested after the maturity period, relate this intention to your Trust Officer. He will then ask you to fill another form for the automatic roll-over of your SDA investment.

 If you choose the 30 days tenor, you will receive a mail from BPI every month updating you on the current status of your SDA investment including the growth on your principal and other relevant information.

RESTRICTIONS

Any individual Filipinos can invest in BSP SDA. However, foreigners and funds from non-resident individuals are not allowed to engage in the SDA facility.

Through Memorandum No. M-2012 – 034 issued on July 13, 2012, BSP annoounced its prohibition of foreign funds and funds from non-resident entities from investing in SDA facility. This move by the BSP was intended to discourage speculative activities.





* Dear Valued PISO Ni Juan Readers,

BPI upgraded the minimum investment amount of its BPI Trust SDA from P50,000 to P500,000 starting November 2012. For more information, we recommend for you to visit any BPI branches near your area.