Those looking for safe but higher-yielding instruments can turn to Long-Term Negotiable Certificates of Deposits (LTNCD). The Philippine National Bank is expected to issue a minimum of P3 billion worth of LTNCDs in the next few days.
What is LTNCD?
Long-term negotiable certificates of deposits (LTNCDs) are peso-denominated negotiable certificates of deposits that mature after at least five years.
Are LTNCDs the same as time deposits?
Almost the same but not entirely the same. Their differences lie mainly on the following:
- (a) Investment period. LTNCDs have relatively longer term, usually at least 5 years and 1 day;
- (b) Tax concern. LTNCDs are usually tax-free because of their longer tenor;
- (c) Pre-termination. LTNCDs cannot be pre-terminated; and
- (d) Negotiability. LTNCDs are negotiable, meaning they can be sold to other investors prior to maturity and can even be used as collateral for a bank loan.
What are the terms of PNB’s LTNCDs?
The indicative interest rate for PNB’s LTNCD is 6.25% to 6.50% per annum. The final rate will be announced in the next few days.
Interest will be paid quarterly. The first interest payment will be on June 30, 2009 then every quarter thereafter until maturity on March 31, 2014.
Minimum investment is P500,000 and succeeding investment must be in increments of P100,000.
Are LTNCDs covered by the PDIC?
Yes, because LTNCDs are considered deposit accounts. PNB says the entire P500,000 is covered by the Philippine Deposit Insurance Corporation (PDIC).
How do I invest in Metrobank’s LTNCDs?
Ask the Trust Group of your bank if they are offering PNB’s LTNCDs. You may also contact the selling agents of this instrument including Deutsche Bank Manila, Allied Banking Corporation, First Metro Investment Corporation, and Multinational Investment Bancorporation. Of course, you may inquire with any PNB branch. You may also call the Marketing Division of PNB at (02) 526-3534.
Related discussion:
- Long Term Negotiable Certificate of Deposits by PNB
- Commercial papers offered by banks
- All about Bonds and other Corporate & Government Securities
Other Investment Products in the past:
