Security Bank has just announced that it is offering long term negotiable certificate of deposit (LTNCD) starting January 13 until 24, 2020. The notes are expected to mature after 5 and a half years with an interest of 4% per year. The question is, is it worth investing? Find out in this article the potential earnings for the newest LNTCD offering.
Security Bank LTNCD
The advantage of LTNDs over bonds (such as those that offered by Arthaland and BDO) is that they’re tax-exempt when held to maturity and up to half a million pesos is insured by the Philippine Deposit Insurance Corporation (PDIC).
Security Bank, according to various news reports and its website, offers its first tranche for this year worth ₱1 billion for the purpose of extending “term liabilities and expand funding base, to improve peso liquidity gaps, and to fund asset build-up.”
The bank’s newest LNTCD offering is up for grabs from January 13 until 24, 2020. The issue date is February 6, 2020 with the maturity scheduled by August 5, 2025. Investors can acquire them for as low as ₱50,000 at an increment of ₱10,000. Interest is going to be paid out to the settlement account very quarter. See the table below for the summary of the details.
|Maturity||5 years and 6 months|
|Offer date||January 13 until 24, 2020|
|Issue date||February 6, 2020|
|Maturity date||August 5, 2025|
Potential earnings from Security Bank LTNCD
To check how much is the potential earning, it is best to imagine two scenarios. One investor decides to invest ₱100,000, and then another invests for ₱1 million. The annual expected interest is going to be ₱4,000 and ₱40,000 broken down to quarterly payment of ₱1,000 and ₱10,000 respectively. The total interest earned for the entire duration until maturity is going to be ₱22,000 and ₱220,000, respectively, which correspond to cumulative gain of 22%.
How can you start investing?
You may fill out the online application. You just have to submit your full name, mobile number, email address, and the investment amount. Required documents are going to be sent via email. And then you can drop by at any Security Bank branch for submission of documents and capital for your investment.