BPI SHORT TERM FUND

Here’s a better alternative to Time Deposits.

Most people park idle cash in Time Deposits (TDs)—and for good reason. Capital is protected, interest is predictable, and principal doesn’t go down.

The downside? You’re locked in.

Once you choose a tenor (3 months, 6 months, 1 year), withdrawing early usually means:

- Loss of accrued interest

- Plus a penalty (often a % of principal or a fixed amount)

In many cases, you still need to formally pre-terminate at a branch, which adds friction—especially when you need liquidity fast.

An Alternative: Money Market Funds (Specifically, BPI Short Term Fund)

Instead of TDs, I currently park idle cash in BPI Short Term Fund.

What is it?

It’s a UITF offered by Bank of the Philippine Islands. BPI pools investor funds and places them in:

+ Short-term Philippine Government Securities (generally ≤ 1 year)

+ Institutional time deposits with preferential rates

+ Placements with the BSP

In short, BPI does the rate-shopping for you.

Why I Prefer This Over TDs

1. Liquidity and speed.

You can subscribe or redeem directly via the BPI mobile app. Redemptions are typically credited the next banking day. If a deal falls through, you can redeploy funds back into the fund in a few taps.

This matters for:

+ Real-estate deals

+ Sudden stock-market opportunities

2. Good deals don’t wait for TD maturities.

Competitive yield.

Money market funds aren’t meant to be aggressive, but they can match—or even exceed—TD rates without lock-ins. In 2025, BPI Short Term Fund delivered roughly ~4.16% net, after fees and taxes (returns vary by period).

3. Minimum investment is Php1,000.

The Trade-Offs

- Principal is not guaranteed and it can move SLIGHTLY up or down as securities are marked to market—though volatility is typically low due to short maturities and high credit quality.⁠

- Management fee: 0.50% annually.

Bottom Line

If you want absolute certainty, TDs still have a place. But if you value liquidity, flexibility, and readiness when opportunity shows up, a money market fund like BPI Short Term Fund is a strong TD alternative for parking cash. It's where savvy investors park their idle cash.

Not advice—just how I manage idle funds.