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Where to park your money: Time Deposits or Treasury Bills
Choosing between a Time Deposit and a Treasury Bill? Here’s what you need to know
By Maria Christina “Yna” Virtudazo
When it comes to finding a good parking spot for your idle cash to earn modest interest safely, two financial products often come up — Time Deposits and Treasury Bills. Both are favorites among conservative investors who want stable returns and peace of mind. But which one suits you best? Let’s find out.
What is a Time Deposit?
A Time Deposit (TD) is a type of deposit product available through banks where you agree to keep your money locked in for a set period. This holding period can range from 30 to 364 days for short-term deposits, and one to five years for long-term options.
In exchange for keeping your funds in the institution, the bank pays the depositors a fixed interest rate. For example, Metrobank pays 4.125%–4.500% per annum (p.a.), depending on the deposit amount and term, through its Online Time Deposit facility. Interest earned is subject to a 20% final withholding tax, which is automatically deducted by the bank.
TDs are considered one of the safest investment options available in the financial market, as they are protected by the Philippine Deposit Insurance Corporation (PDIC) for up to PHP 1,000,000 per depositor per bank.
However, unlike regular savings deposit accounts, funds in a TD cannot be withdrawn freely before maturity. Otherwise, early withdrawal will result in pre-termination penalties.
What is a Treasury Bill?
A Treasury Bill (T-Bill) is a short-term fixed income security issued by the national government. In the Philippines, government securities such as T-Bills are issued by the Bureau of the Treasury (BTr). Their maturity profiles are typically 91-days, 182-days, and 364-days.
T-Bills are sold at a discount, which means investors buy them for less than their face value and receive the full amount at maturity. The difference between the face value and purchase amount will be your earned interest, which is also subject to a 20% final tax.
These securities can be accessed through banks like Metrobank, online investment platforms such as Metrobank’s Wealth Manager, or licensed brokers. Given that they are fully backed by the national government, T-Bills are considered virtually “risk-free” from default, and often serve as a benchmark for short-term interest rates.
Unlike TDs, T-Bills have no holding period, meaning investors can freely sell these securities to the secondary market. However, the selling price in the secondary market may result in a gain or loss, depending on prevailing interest rates. Additionally, once sold in the secondary market, investors forfeit the right to redeem the full face value at maturity.
How are they alike?
Despite having different issuers, TDs and T-Bills share several similarities. Here’s a side-by-side look at their shared features:
| Feature | Time Deposits | Treasury Bills |
|---|---|---|
| Low-risk investment | Yes | Yes |
| Ideal for conservative investors | Yes | Yes |
| Fixed returns that are calculated at the time of investment | Yes | Yes |
| Suitable for short-term goals and capital preservation (e.g., emergency fund, parking for idle cash) | Yes | Yes |
| Subject to 20% final tax | Yes | Yes |
How are they different?
While they share similarities, here’s how they differ:
| Feature | Time Deposits | Treasury Bills |
|---|---|---|
| Issuer | Bank (e.g., Metrobank) | Philippine government (i.e., Bureau of the Treasury) |
| Tenor | 30 to 364 days (for short-term); one to five years (for long-term) | 91, 182, or 364 days |
| Interest Structure | Fixed interest rate | Discounted price, redeemed at face value |
| Risk Level | Very low (bank + PDIC insured) | Virtually risk-free (government-backed) |
| Liquidity | Penalties for early withdrawal | Can be sold in the secondary market before maturity (price varies) |
| Minimum Investment | PHP 10,000 (varies by bank) | PHP 5,000 via BTr auctions |
| Accessibility | Through banks | Through banks, brokers, or the BTr |
How are they different?
While they share similarities, here’s how they differ:
| Term | Online Time Deposits | Treasury Bills |
|---|---|---|
| 91 days | 4.125 to 4.25% p.a. | 4.98% p.a. |
| 182 days | 4.125 to 4.50% p.a. | 5.13% p.a. |
| 364 days | 4.125 to 4.50% p.a. | 5.23% p.a. |
Disclaimer: Yields for time deposits may vary across different banks and are subject to change without prior notice. The yields presented are Metrobank’s current ranges through the Online Time Deposit facility. The actual yield within the range will depend on the amount invested. Meanwhile, Treasury Bill yields fluctuate weekly based on market participation and prevailing economic conditions. The rates provided herein are as of October 6, 2025, and are for informational purposes only. Please consult with your relationship manager for the most current rates and investment guidance.
As shown in the table above, T-Bills generally offer slightly higher yields than TDs, due to prevailing market rates and monetary policy trends. TDs, on the other hand, offer predictable returns and greater simplicity — suitable for investors who prefer a more hands-off approach.
Which one suits you best?
Having said all this, it all boils down to one question: Which one suits you best? The right choice depends on your financial goals and preferences.
If you want:
- Guaranteed, predictable interest rates.
- Convenience of opening through your bank.
- PDIC insurance for added security.
Then, choose Time Deposits.
If you want:
- Slightly higher returns.
- Direct exposure to government-backed instruments.
- A more flexible, market-driven return.
Then, choose Treasury Bills.
Conclusion
Both TDs and T-Bills are excellent choices for low-risk investments that can protect your capital while generating modest income.
In a volatile market, these instruments serve as a strong foundation for a balanced portfolio — steady, secure, and quietly compounding over time.
Once you have identified which product suits your preferences, getting started is easy. You can conveniently open a Time Deposit through the Metrobank App, Metrobank Online or Earnest App, or buy and sell Treasury Bills online via Wealth Manager by Metrobank — all in just a few taps.
If you wish to know more about Metrobank’s Online Time Deposits, you click here. To sign up to Wealth Manager to buy Treasury Bills and have access to Wealth Insights exclusive content, click here.
For a more personalized guidance, reach out to your investment specialist or relationship manager today.
(Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.)
MARIA CHRISTINA “YNA” VIRTUDAZO is an Investment Counselor at Metrobank’s Institutional Investors Coverage Division. Her work involves analyzing High Net Worth clients’ portfolios and providing actionable insights and recommendations to better enhance their portfolios’ overall returns. She is a licensed Fixed Income Market Salesperson of the Securities and Exchange Commission and a certified Unit Investment Trust Fund (UITF) salesperson. She graduated with a bachelor’s degree in business administration from the University of the Philippines – Diliman. She spends her free time listening to K-pop, writing fanfiction, and watching Netflix series and K-dramas.