5 Smart Ways to Invest Your House Down Payment
What are the places to grow your house down payment?
- High-Yielding Savings Account
- GCash Invest Money
- Mutual Funds
- Pag – IBIG MP2 Savings Program
- SSS PESO Fund
Own your dream house sooner by investing your down payment to a secure place where it can grow. Aside from keeping your savings in a bank account or a money jar, you can opt to invest or save cash on the right type of account. Where you save highly depends on when you start and when you want to withdraw the money for use. In the case of saving money for the down payment of a house, it is best to save it in places where there is rapid or steady growth. A PagIbig housing loan in Nueva Ecija could be an option other than savings accounts and mutual funds. For more options, here are some of the places where your down payment can grow into multitudes.
High-Yielding Savings Account
When saving money for a home down payment, people initially think it is best to open a savings account. While the money is stable with banks, basic accounts offer minimal returns. For a more significant growth return, choose to open a high-yield savings account over a short-term savings account.
Gauge your income, if you think you can save money within two to three years, you will want to have ready access to it. Most high-yield savings accounts reach over 1.75 percent interest. The interest rate is better than the few returns that most traditional and basic savings accounts can provide.
GCash Invest Money
GCash Invest Money allows anyone who owns a smartphone to start an investment. It is ideal for first-time investors with limited income, college students or fresh graduates looking forward to purchasing a home in the near future. The greatest feature of GCash Invest Money is its allowable initial investment. You can start to grow your money with a meager amount of 50 to 500.
This type of investment does not require any documentation or maintaining balance. Simply register and create an account to start investing. With just a few clicks, you can manage your investments online.
The risks of investing in GCash Invest Money are minimal to none. Since it is a relatively new investment vehicle and you are investing a moderate sum of money, you are ensured there are no drawbacks.
For those looking forward to long-term financial goals, mutual funds are one of the best investment vehicles to choose from. Mutual funds basically pool your money together with other investors to establish a bigger fund. This fund will then be invested in bonds stocks or money market funds which are managed by a mutual fund company. These funds are reliable as they are regulated by the Securities and Exchange Commission (SEC).
Mutual funds are suitable for beginners who do not possess any expertise to monitor their fund’s performance and growth. A professional fund manager will make investment decisions with your knowledge and under your approval.
The rule of the mutual fund investing is the higher the investment, the longer the duration and the higher the profit. If you are looking forward to acquiring a house in the next four to eight years, then mutual funds are suitable for you. Otherwise, choose to save through other investment vehicles.
Pag-IBIG MP2 Savings Program
To avail of any savings program from PagIbig, a person must be a member. Regardless of age and monthly income, a Pagibig member can enroll under enhanced programs. MP2 savings and dividends can merely be claimed after five years. However, there are cases wherein you can choose to withdraw earlier. These cases include total disability, insanity or unemployment due to critical health conditions. Moreover, when the member dies before the five-year maturity period, their beneficiaries may claim the savings.
One of the most significant reasons why opting to invest your house down payment in a savings program with Pagibig is the opportunity to reinvest. Either reinvest the full amount or partial amount as a lump sum payment to keep on saving after the five-year term.
SSS PESO Fund
Compared to the Pagibig savings program, the SSS Peso Fund includes stricter enrollment procedures and qualifications. Only SSS members who paid at least six consecutive SSS contributions within the last 12 months prior to investment fund enrollment are entertained. In terms of withdrawing the investment, you can only claim up to 35% of your savings. The remaining percentage can wholly be withdrawn when you strike the 60-year-old mark or when you file for retirement.
The reason why this type of fund is included in the list of suitable investments for a home down payment is the opportunity to withdraw it before the five-year retention period. The downsides are penalty charges and service fees. Otherwise, your money is safe, and it will continue growing as you prepare a home for your retirement as well as your future grandchildren.
For first-time home buyers, there is nothing more exciting than gaining a hold of the house key and being able to experience financial freedom. While there are so many factors to consider when buying a house, saving the down payment must be the most daunting task. Saving for a down payment is the first critical step towards enjoying a house. Wherever you are in the country, be it in Manila or Nueva Ecija, a Pagibig housing loan as an investment vehicle remains one of the most reliable and accessible options.
Investments tend to grow faster with Pagibig and SSS funds. They are flexible, reliable and easy to apply for. Take note that finding the balance between risk and reward, flexibility, as well as timing must be greatly considered in choosing an investment vehicle.