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MP2 vs time deposit vs UITF

Put the same peso savings into MP2, a time deposit, a digital bank, and a UITF, and compare the results after tax.

How you save

Rate assumptions (edit to match today's offers)
UITF type
expected % · fee %

Pag-IBIG MP2

₱359,211

after 5 yr on ₱300,000 saved

₱59,211 net gain

Tax:
Tax-free
Access:
Locked 5 years
Risk:
Very low

Government-backed. Early withdrawal only for specific reasons.

Time deposit

₱329,142

after 5 yr on ₱300,000 saved

₱29,142 net gain

Tax:
20% withholding tax on interest
Access:
Locked per term; penalty to break
Risk:
Very low

PDIC-insured up to ₱1M per depositor per bank. Rates reset each term.

Digital bank savings

₱325,731

after 5 yr on ₱300,000 saved

₱25,731 net gain

Tax:
20% withholding tax on interest
Access:
Anytime
Risk:
Very low

PDIC-insured. Promo rates often drop after a few months.

UITF — balanced fund

₱350,594

after 5 yr on ₱300,000 saved

₱50,594 net gain

Tax:
No tax on gains
Access:
A few days to redeem
Risk:
Medium

Returns are not guaranteed; the rate here is an assumption, not a promise.

Value at the end of each year

YearPag-IBIG MP2Time depositDigital bank savingsUITF
1₱62,314₱61,183₱61,050₱61,986
2₱129,065₱124,605₱124,083₱127,796
3₱200,568₱190,349₱189,163₱197,664
4₱277,163₱258,498₱256,356₱271,842
5₱359,211₱329,142₱325,731₱350,594

Estimates only. MP2 credits dividends yearly on the average balance; bank products compound monthly at the after-tax rate; the UITF assumes a steady return net of fees, which real funds never deliver in a straight line. Not investment advice.

Same money, four homes

An OFW with ₱5,000 a month to set aside usually chooses between Pag-IBIG MP2, a bank time deposit, a high-interest digital savings account, or a UITF from a bank's trust department. They differ less in headline rate than in three things this tool makes visible: tax, access, and risk.

Why MP2 usually wins the numbers

Bank interest is hit with a 20% final withholding tax, so a 4.5% time deposit is really 3.6%. MP2 dividends are tax-free, and 2025's 7.12% is roughly double what banks pay. The price is a five-year lock and the fact that the rate is declared after the fact, not promised in advance.

When the others make sense

Money you might need next year belongs in a digital bank account, not MP2. A time deposit suits a known short-term goal. A UITF is for money you can leave alone for years and can stand to see fall in value on the way; balanced and equity funds have beaten MP2 over long stretches and lost to it over others. Most OFWs end up with a mix: an emergency fund in the bank, MP2 for the five-year plan, and a UITF or stocks for the long run.

Questions

Are the default rates current?
They are reasonable 2026 starting points, not live quotes. Check your bank’s current offer and type it in; the comparison updates instantly.
Is a UITF taxed?
No withholding tax is charged on UITF gains at redemption, but the fund pays taxes internally and charges an annual trust fee, which the calculator deducts from the expected return.
Can I lose money in MP2 or a time deposit?
MP2 is government-guaranteed; bank deposits are PDIC-insured up to ₱1 million per depositor per bank. A UITF is not insured and can lose value.

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