With digital banks offering high-interest returns nowadays, one would think, should we just put our money in digital banks rather than invest in stocks, mutual funds, or even MP2?
Maya Savings has captured the attention of many due to its advertised “10% p.a.” interest rate to the point that some are considering just investing in Maya rather than MP2. But should we really forsake MP2 and other investment vehicles in favor of Maya alone? Let’s get into specifics, shall we?
Maya interest rates in a nutshell
The actual base interest rate of Maya Savings is 3.5% per annum. And this is only applicable to balances up to 5 Million pesos. This means that if you put in more than 5M, the amount beyond that will not earn any interest.
But they advertise that you can get up to 10% interest p.a. Yes, they have a “Boost Interest” promo that will allow you to earn up to 10% interest rate. However, there are conditions in order to get it and there’s a limit to it as well.
- You need to perform missions like spending a certain amount before you can reach the 10% boost interest.
- The boost interest will only be applied to your first 100K balance. So anything above 100K will simply earn the 3.5% base interest.
Furthermore, the current promo is only good until August 31, 2023.
In addition, take note that interest earnings that you get from banks are taxed by 20%. So in reality, in the event that you’re able to satisfy the mechanics of the promo, you only get a net interest rate per annum of 8% which again will only be applied to your first 100K balance.
A quick rundown of MP2
- It’s a savings program guaranteed by the government.
- Earnings are tax-free
- The average dividend rate (in the last 5 years) is above 6%. For 2022, the dividend rate is 7.03%.
Check my article for more detailed information on how MP2 works.
Comparing Maya Savings and MP2
- Maya Savings allows you to earn up to 10% interest rate p.a. (provided you have accomplished the set missions) on your first 100K balance only. In contrast, the announced dividend rate for MP2 will be applied to all your balances.
- The 10% interest rate of Maya is just a promotional boost offer that is just good until August 31.
- Earnings are taxed by 20% with Maya Savings while you get tax-free dividends with MP2.
- You can withdraw your balance in Maya Savings anytime you want while MP2 has a lock-in period of 5 years.
Kuro-kuro ni Kuya Well
With the brief comparison above, I think we can say that MP2 trumps Maya Savings.
Sure, you may get up to a 10% p.a. interest rate but if you factor in the 20% tax, you will only get 8% which is di nagkakalayo sa makukuha mo from MP2 with the latest dividend rate. But then again, you have to consider kung masustain ba yan ni Maya for a year. Kasi kung hindi, then, di actual interest rate p.a. would even be lower.
And let’s not forget that it’s only applied to your first 100K. So if you’re going to put in higher that amount, hanggang 3.5% lang sya.
That said, even with a base interest of 3.5% p.a., Maya Savings is still better than all commercial banks that give out a measly less than 1% interest rate.
So what I suggest is to use Maya Savings and other digital banks like CIMB, Seabank, or GoTyme to deposit your emergency funds. But once you’ve reached your target emergency fund amount, put your money on other investment vehicles like MP2, stocks, mutual funds, real estate, REITs, among others.