Many of us grew up hearing the same piece of advice: save your money in the bank, let it earn interest, and avoid unnecessary spending. While that advice remains fundamentally sound, it doesn't quite work the same way it used to. Because in today’s financial landscape, simply “saving” money might not be enough. In fact, it could mean you're quietly losing money over time. Sounds counterintuitive, right? How can saving lead to losses? The answer lies in how inflation interacts with interest rates and the real value of your savings.
To give context, the Philippine Statistics Authority recently reported an inflation rate of just 1.4% in April 2025—the lowest in years and even lower than the 3.8% rate in April 2024. On the surface, this seems like great news. Slower inflation means lower price increases, which helps consumers. But if you’re someone trying to grow your savings, this environment can present hidden challenges.
Let’s break things down.
Inflation tracks how much the prices of goods and services rise over time. Even at modest levels, inflation gradually reduces what your money can buy. Suppose you leave PHP 100,000 in a regular savings account earning 1% interest per year. After a year, you technically have PHP 101,000 (not counting taxes yet). But if inflation is at 2%, which means you'll need PHP 102,000 to afford the same goods you could buy with your PHP 100,000 a year ago. So, even though your balance increased, the actual value of your money fell.
This is the quiet cost of inflation.
Your money may look like it's growing, but if the growth doesn’t outpace inflation, you’re effectively losing value. This is why relying solely on a low-interest savings account may give a false sense of financial progress. Because, while interest rates are meant to help your money increase in value, traditional bank accounts often don’t offer much help. Specifically, many regular savings accounts yield less than 1% interest annually.
So, where should you place your money if you want it to work harder?
If you're looking for more stability and higher earnings, Maya Time Deposit Plus is worth exploring. This option allows you to lock in your funds for a fixed period of three, six, or twelve months in exchange for a higher interest rate. Actually, as the #1 digital bank in the country, Maya offers what could be the highest interest rate time deposit in the Philippines. You can create up to five accounts with up to PHP 1 million balance each, and you can earn up to 6.00% p.a. Minimal cancellation fees apply in case you need to access your funds. Moreover, deposits are insured by PDIC up to PHP 1,000,000 per depositor.
Another promising solution is to move your savings into a high-interest savings account. Maya Savings, for instance, starts with a base rate of 3.5% per annum. By actively using the Maya app for things like buying load, paying bills, using Maya Easy Credit, or making payments via QR Ph or Maya Card, you can boost that rate up to 15% per annum. That’s a significant leap that can mitigate the effects of inflation.
Moreover, opening an account is easy and entirely digital. You can do it in minutes through the Maya app—no paperwork or waiting in line required. As a fully regulated institution under the Bangko Sentral ng Pilipinas, Maya also ensures that your funds are secure. Aside from the convenience and safety, Maya comes with tech features like real-time transaction alerts and biometric logins that help users manage their money more securely.
Beyond savings and time deposits, there are other options worth considering. Investments like mutual funds, stocks, inflation-indexed bonds, or even real estate offer the potential to grow wealth over the long term. These options come with risks, of course, so it’s best to start small and learn how each one works. A good first step might be combining a high-interest time deposit with a beginner-friendly investment like a balanced mutual fund.
Altogether, saving remains a vital part of any financial plan. But in today’s economic environment, saving smart matters more than traditional saving. Because inflation, even when low, steadily erodes the purchasing power of money. Moreover, interest rates only help if they keep pace—or better yet, outpace—that erosion. That’s why it’s crucial to explore better alternatives, calculate your potential gains, and act with intention.
