Few months ago, our family in Malitbog, Southern Leyte were talking about the “Double Your Money Investment” that some of our relatives (Laplana Clan members) took.

By just looking at the scheme, “Double Your Money,” it seems that it’s another kind of money scam. We were really wondering if the banks that offer this product could really pay the depositors the interest promised on the terms and condition.

I heard that one of my relatives invested his 1M money in a certain company or bank. Now if this money will be doubled in 5 years, then he’s earning more or less 20% interest per year. That’s too high than what my current money is earning which is less than 1% interest only.

Well, this kind of product is really possible and can be legit too. Dr. Ravalo discussed it already at his column at the Inquirer dot Net.

What is probably being offered to you Geno is a double-your-money type of deposit. This takes advantage of a provision in the law that exempts 5-year deposits from the final withholding tax. With this tax break, you would only need an interest rate of 14.8 percent to double your money in five years.

What are the risks to these? The same law that exempts you from the withholding tax says that if you withdraw before the five years are up, you have to pay the tax. The risk here is whether you have enough resources elsewhere to keep you from withdrawing the money you put in the potentially 5-year deposit. If liquidity is an issue, the chances of doubling-your-money in five years are quite remote. (source)

On that column, he mentioned only two risks in taking this kind of investment which are: paying the tax when withdrawn before  the 5 years contract; and “whether you have enough resources elsewhere to keep you from withdrawing the money you put in the potentially 5-year deposit.” What is not mentioned is the risk in losing your money if the bank will be closed due to bankruptcy.

Well, investing your money on the Double-Your-Money scheme is really a gamble. (But I think all businesses can be considered gambled.) There are really a risks in taking this kind of investment but who knows you’ll be lucky enough to get what you are expecting.

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