Where can parents save for their children’s college education? Many pre-need firms in the Philippines have collapsed.
Where can we save and invest? So we will have money for our kids’ college tuition?
There are investments like stocks, mutual funds and bonds, but we must learn about how they work first. If you want to learn about mutual funds, the website of BPI, bpiexpressonline.com, is one site that you can explore.
There are also still reliable insurance and pre-need companies in the Philippines, but you need to research about their backgrounds, their performance, and how they went through past economic crisis worldwide and in the Philippines.
There are also 5-year time deposits or auto-renew time deposits offered by banks, but don’t expect big interests. Avoid investing in rural banks’ time deposits that offer interest rates much much higher than those offered by big commercial banks. The website of PDIC, pdic.gov.ph, gives advice on time deposits.
Here are 2 investment options: Pag-ibig MP2 and SSS Flexi-Fund.
One of the big advantages of Pag-ibig MP2 and SSS Flexi-Fund over pre-need or insurance plans is the reality that you will never lose your savings in Pag-ibig MP2 and in SSS Flexi-Fund in case you lose your job or business and you are not able to continue adding to your MP2 and Flexi-Fund savings.
With pre-need or insurance plans, you will lose a BIG portion or ALL of what you have paid to these plans if you are not able to continue making your monthly payments.
Pag-ibig MP2 is offered to all Pag-ibig members while SSS Flexi-Fund is only for OFWs who are paying the SSS maximum monthly contribution, which is 1,760 pesos.
This chart below shows estimates of how much money you will get after paying 1,500 pesos monthly for 5 years.
|YEAR||PRE-NEED||PAG-IBIG MP2||SSS FLEXI-FUND|
|12th Year||Get 20,000|
|11th Year||Get 20,000|
|10th Year||Get 20,000|
|9th Year||Get 20,000|
|8th Year||Get 20,000|
|7th Year||Get 5,000|
|6th Year||Get 5,000||Get 104,500||Get 104,900|
|1st year to 5th Year||Pay 1,500 for 5 years. Total Payment is 90,000.||Pay 1,500 for 5 years. Total Payment is 90,000.||Pay 1,500 for 5 years. Total Payment is 90,000.|
|Has Credit Insurance, No Government Guarantee||No Credit Insurance, Has Government Guarantee||No Credit Insurance, Has Government Guarantee|
. Credit Insurance means the pre-need firm will pay the 1,500 monthly premiums if the payor dies within the paying period
. Some pre-need plans do not give 5,000 on the 6th and 7th year. Instead they give 20,000 on the 13th year.
. The pre-need plan above may not represent all pre-need plans.