If you have been saving for quite some time now, you will notice that interest rates from banks are quite low it’s almost non-existent. With this in mind, two of our government agencies came up with a savings program primarily for those who want to be able to save up with higher interest rates.
Pag-ibig now has MP2 savings program while SSS has their Peso Fund. If you have enough amount to save up for both then good for you. But for most people, saving for both can be quite expensive. But how are you going to decide which of the two you are going to sign up for?
Below are some facts you can study before choosing.
Common Features
Before we start citing the difference between the two, here are some features that you will find common for both.
- Optional savings programs
- Tax-free
- Guaranteed by the Philippine government (meaning you won’t lose your savings)
- Open to all regular Pag-IBIG and SSS members
- Higher interest rates than savings accounts and time deposits in banks
- Monthly payments not required; no penalty for missed monthly payments
Eligibility Requirements
Each savings program has requirements for those who wish to avail.
Pag-ibig MP2 can be availed by all Pag-ibig members regardless of age and monthly income. For you to avail of the MP2, you need to have at least 24 months Pag-ibig contribution. This program also extends to retirees and pensioners.
SSS Peso Fund has more strict requirements than Pag-ibig. Any SSS members who meets these conditions can open an account.
- 55 years old and below
- Paid at least six consecutive monthly SSS contributions (under the regular SSS program) within the last 12 months prior to enrollment
- For self-employed, voluntary, and OFW members: payment of maximum contributions under the regular SSS program
- No final claim filed under the regular SSS program (retirement, total disability, or death benefits)
Minimum Monthly Savings and Interest Rates
If you are eligible for any of the savings program, your next step would be to ensure that you can afford the minimum savings monthly amount.
Pag-ibig MP2 has a minimum monthly savings of P500 and can earn interest rates per annum. For 2017, MP2 had 8.11% interest rate.
On the other hand, SSS Peso Fund requires a minimum of P1,000 monthly savings amount. However, you can save up to P100,000. The savings and earnings of SSS members go to three accounts: retirement/total disability (65%), medical (25%), and general purpose (10%). The general purpose account is allocated for education, housing, and livelihood needs. SSS Peso Fund’s interest rates is dependent on Treasury Bond rates, which about 1.85% to 3.75%.
Withdrawal of Savings
Pag-ibig MP2 dividend can be withdrawn annually or on the 5th year. Savings matures on the 5th year but can be withdrawn early in case of total disability, insanity, or unemployment due to health reasons. When a member dies before the five-year maturity period, his or her beneficiaries can claim the savings. After claiming, you can renew your MP2 membership by reinvesting the amount fully or partially as a lump-sum payment and keep on saving for another 5 years.
SSS Peso Fund you can withdraw only 35% of your savings. The remaining 65% can be withdrawn once you reach 60 years old or if you file for retirement. You can also claim it earlier if you file for total disability.
Conclusion
On the onset, MP2 is a better option for savings since it has a higher interest rate with no maximum limit on how much you can save. However, if you are the type of person who easily spends money and you are saving for retirement, SSS is a better option since they will not allow you to withdraw your money before retirement.
Be the first to comment