What Are PERA Time Deposits? Your Guide to Tax-Free Retirement Savings

(SPOT.ph) Retirement may feel like forever away, but it’s never too early to start preparing for it. After all, not everyone has a cushy pension package or generational wealth to fall back on.

If you’re looking for ways to build your future funds, maybe you’ve already come across the Personal Equity and Retirement Account (PERA). For those who don’t know, PERA is the Philippines’ official voluntary retirement savings program that’s designed to be an extra safety net on top of compulsory pensions like SSS or GSIS.

In a recent memorandum issued on August 20, the Bangko Sentral ng Pilipinas (BSP) expanded the list of investment options allowed under PERA to include time deposits.

Here’s what you need to know about PERA time deposits—and whether this tax-advantaged, low-risk option is a good choice for your retirement goals.

A PERA time deposit functions largely like a regular time deposit, but funds are held within a contributor’s PERA and are subject to the rules and tax incentives of the PERA Act of 2008. 

Basically, you lock away a sum of cash with a bank offering a BIR-accredited PERA time deposit program for a fixed period (minimum of 30 days). In return, the bank pays you a guaranteed interest rate. In a regular time deposit, the bank automatically deducts a final withholding tax from any interest your money earns. In contrast, interest earned from a PERA time deposit is completely tax-exempt.

Beyond tax-free interest, you also receive annual tax credits. Every peso you contribute to PERA earns a 5% tax credit against your annual income tax. Tax incentives are capped at the maximum contribution per year: P200,000 for Philippine residents and P400,000 for OFWs.

When your time deposit term matures, the principal and interest remain safely within your PERA account. Terms last for a minimum of 30 days, while the maximum maturity depends on each individual bank. Then you can roll it over into another time deposit term or reinvest it in other PERA-accredited assets without tax penalties.

Since PERA is specifically designed for long-term retirement, funds are meant to sit in the vault until you reach at least 55 years old with a minimum of 5 years of total contributions. Once these conditions are met, you can cash out your entire PERA balance (principal plus all interest earnings) completely free of income and estate taxes.

Now that time deposits are officially an eligible investment option under PERA, here are the steps to sign up for this low-risk retirement program.

To open an account under this program, you must meet two main criteria: be at least 18 years old and have a valid Tax Identification Number (TIN). Locally employed individuals, self-employed professionals, and Overseas Filipino Workers (OFWs) are all eligible, according to the BSP’s PERA guidelines.

You don’t open a PERA time deposit on its own. First, you need to open a PERA through an accredited PERA Administrator, which will manage your account and give you access to eligible PERA investments.

To find a PERA Administrator, visit the BSP’s PERA page and scroll to the list of accredited providers. You can click the links for BDO, BPI Wealth, ATRAM, DragonFi, Luna Securities, and other available PERA platforms to compare your options.

Since PERA time deposits were only added as an eligible investment in August 2026, the option may not be available from every provider just yet.

Once you’ve chosen a PERA Administrator, go to its website or app and look for the option to open or register for a PERA account. The exact process varies by provider, but you’ll generally need to submit your TIN, a valid government ID, and other basic personal information.

As part of the sign-up process, you’ll complete a short Client Suitability Assessment covering your investment goals and risk tolerance, which helps your administrator determine which PERA products are appropriate for you.

Once your account is open, check the PERA investment products available through your administrator and select a time deposit if one is offered.

Local residents can contribute up to P200,000 per calendar year to enjoy PERA tax perks, while OFWs are entitled to a higher limit of up to P400,000 annually. Of course, you’re allowed to save beyond these thresholds. However, excess funds will not qualify for the 5% personal income tax credit or PERA tax exemptions.

When it comes to maturity terms, PERA time deposits carry a minimum maturity period of 30 days. Maximum terms depend on what each issuing bank makes available.

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