Savings accounts allow you to save money and also offer interest. You can access your money when you need it through the net banking, phone banking, or ATM network.
What is a Savings Accounts?
A savings account is also known as a deposit account that offers interest. You can hold a savings account with a financial institution or a bank. The financial institution or the bank may put a limit on the number of withdrawals you can make each month. A fee may be charged if you do not maintain the minimum balance required in the month. Cheque facility is not provided with your savings account.
Why open a Savings Accounts?
Following are a few reasons as to why you must open a savings account:
- You can start building your wealth. It is the first step that has to be taken so that you can park your finds and accumulate enough to invest in real estate, stocks, etc. You will earn interest on the amount and it will keep growing for the length of time you let the money in your savings account.
- You can access the money easily. It is not safe to have huge amounts of cash lying around at home. Your money will not be protected. When you put the money in a savings account, you can access it at any time and it will be protected by the law.
- You will need some money for meeting unexpected expenses and you cannot always liquidate your investments. It works as an emergency fund as well as long as there are sufficient funds. Ideally, you must set aside 6 months of your income for emergencies.
- When you have accrued a huge debt, you can use the money from your savings account to clear it out so there is no negative impact on the credit score.
- You can accumulate capital for further investments. If you are regular with putting money in your savings account, you will build significant savings in no time and it will serve as a launching pad for future investments.
- You can save the money to buy the things you always wanted. You can also save to go on a vacation. You must keep aside a portion of your income every month to deposit in your savings account and only touch it when you have met your goal. The best and easiest way to do this is to automate the transfer, you will not miss the transfer and you will get used to automate savings tools.
Features and Benefits of Savings Accounts
Following are the various features and benefits of a savings account:
- You earn interest on the amount you deposit in your savings account.
- You can keep the funds in the account that you do not need at the moment.
- They are the most liquid form of investments after cash.
- It helps you to facilitate saving and also let you access the funds easily.
- There are no penalties charged for withdrawal.
- Because of the liquidity, you can access the funds in emergency situations.
- When you deposit the amount in the bank, it is protected by the law. Most banks in the Philippines are members of Philippine Deposit Insurance Corporation. The amount deposited are secured up to P500,000 per individual. The Philippine Deposit Insurance Corporation will give the amount to the depositors in the event the bank fails to pay the amount.
- Though the interest offered is lower than the interest offered on other investment options, you will still earn a good and steady rate. It is better than letting the money sit in your safe at home. You will get a substantial return and the money will be safe.
- The funds in your savings accounts can be accessed easily. You can transfer the money electronically. You can even access the funds via the ATMs.
Types of Savings Account
Following are the various types of savings account available in the Philippines:
- ATM savings account: The deposit transactions are done through cash deposit machines and over the counter. The withdrawals are done via ATMs.
- Passbook savings account: The passbook has to be presented for withdrawal and deposit transactions.
Top Banks Offering Savings Accounts
Following are the banks that offer savings accounts in the Philippines:
- BPI Savings Account
With BPI Savings Account, you can keep your money safe and watch your funds grow. Following are the different types of savings accounts offered by BPI:
- Easy Saver: There is no maintaining balance requirement. A minimal fee is charged for withdrawals.
- Advance Savings: This account allows you to enjoy the interest on the amount deposited ahead of time. Higher interest rates offered than regular savings account.
- Express Teller: Everyday finances are simplified with this account. You earn interest on the amount deposited. You can access the funds through ATMs, BancNet and Expressnet ATMs, and Express Teller. You can transfer funds conveniently by enrolling recipient account.
- Jumpstart: This account is designed for those between the ages of 10 and 17 years. This will help the younger generation to get in the habit of saving.
- Save-up: The amount is automatically deducted and set aside from your ATM account each month. You will not miss setting aside money at any time.
- Pamana Padala: This account is designed for OFWs. This account also offers free Remittance Income Continuation plan.
- Pamana Savings account with free life insurance: With this account, you will get a free life insurance that is worth 3 times your account balance. The maximum insurance amount offered is up to P2 million. The account is available in Peso and Dollar. You can choose between passbook and debit card. You need not pay any premium for the insurance. Medical check-up is not required for the insurance. The insurance will be in effect from the day you open the account.
- Maxi Saver: Higher interest rate is offered on this account. You also get a bonus interest of 0.5% p.a. provided there are no withdrawals made in the month.
- Foreign Currency: You can open a savings account in any form of currency such as Yen, US Dollars, Francs, Pounds, and Euros.
- Passbook: This is ideal for those who like keeping the record in a passbook. You will earn interest on the amount you deposit and you can also monitor the transactions in the simplest way.
- BDO Savings Account
BDO offers the following types of savings account:
- Peso Savings Account: The minimum initial deposit required is P5,000. The minimum maintaining balance requirement is P10,000. The minimum balance required to earn interest is P10,000.
- ATM Savings: The minimum initial deposit required is P2,000. The minimum maintaining balance requirement is P2,000. The minimum balance required to earn interest is P5,000.
- Passbook Savings: The minimum initial deposit required is P5,000. The minimum maintaining balance requirement is P10,000. The minimum balance required to earn interest is P10,000.
- Prime Savers: The minimum initial deposit required is P2,000. The minimum maintaining balance requirement is P2,000. The minimum balance required to earn interest is P5,000.
- Optimum Savings: The minimum initial deposit required is P30,000 and P50,000 for business. The minimum maintaining balance requirement is P30,000 and P50,000 for business. The minimum balance required to earn interest is P30,000 and P50,000 for business.
- Direct Deposit: The minimum initial deposit required is not required. The minimum maintaining balance requirement is not required. The minimum balance required to earn interest is P5,000.
- Junior Savers: The minimum initial deposit required is P100. The minimum maintaining balance requirement is P100. The minimum balance required to earn interest is P2,000.
- Metrobank Savings Account
Following are the savings account offered by Metrobank:
- Passbook Savings Account: This is an interest bearing account and you can keep a track of the transactions through a passbook. The funds can be deposited at any Metrobank branch.
- Metrobank Debit/ATM Savings Account: This is an account that lets you access the fund at anytime and anywhere. You get an ATM card through which you can conduct transactions.
- MetroDollar Savings Account: You can save money in dollars through the account. You will earn the interest in dollars as well.
- Other Foreign Currency Savings Account: You can deposit the money in different currencies such as Euro, Dollar, British Pound, Japanese Yen, Swiss Francs, Canadian Dollar, Chinese Yuan, and Australian Dollar.
- Fun Savers Club: This account is for kids and teens under 18 years. It helps you to teach your children the value of saving. P50,000 free educational trust benefit is offered. This account also offers personal accident insurance that is twice the amount of deposit. You will also get exclusive privileges and discounts.
- Union Bank Savings Account
You can open a regular savings account and a dollar access account.
- Regular Savings Account: The initial deposit required is P50,000. The minimum balance required is P50,000. You can earn interest when you maintain a minimum balance of P50,000. The interest rate offered is 0.10%. Maximum deposit insurance offered for each depositor is P500,000.
- Dollar Access Account: The initial deposit required is $1,000. The minimum balance that you have to maintain is $10,000. You earn interest when you maintain a balance of $25,000. The interest rate offered is 0.10%.
- Citibank Savings Account
Following are the various savings accounts offered by Citibank:
- Citibank Peso Bonus Saver: Minimum balance required to open the account is P50,000. The base interest rate starts at 0.7% p.a. You can earn a bonus interest rate of 0.10% p.a. when you increase the average balance.
- Citibank Peso High Rate Saver: There is no fixed term for interest rates. You can access the funds at over 900,000 ATMs around the world. You can check the balance, transfer funds, and get the information through Citibank Online. You get 2 free account withdrawals in a month. You must maintain a minimum balance of P100,000 in order to earn interest.
- Citibank e-Savings: High interest rate is offered. You get two free withdrawals in a month. You can access your account through Citibank Online. Online fund transfers are free and you can transfer as many times as you want. The interest rate offered is 0.75% p.a.
- Citibank Dollar Saver: You can keep your money safe in this account while you earn interest on it. The minimum maintaining balance required to earn interest is $1,000. The interest offered is 0.10%. You get 2 free account withdrawals in a month.
- Citibank Euro Saver: The minimum maintaining balance required is EUR1,000. The interest offered is 0.105. You get 2 free account withdrawals in a month.
- Security Bank Savings Account
Following are the two types of savings accounts offered by Security Bank:
- All-access: The opening balance required is P5,000. The minimum maintaining balance required is P25,000. The interest offered is 0.10% when you have maintained P100,000. You get free ATM transactions, Everyday MasterCard, passbook and cheque book facility, free OTC and Interbranch transactions.
- Easy: The opening balance required is P5,000. The minimum maintaining balance required is P5,000. The interest offered is 0.10% when you have maintained P100,000. You get free ATM transactions, Everyday MasterCard, and you will be charged a small fee for the over-the-counter transaction.
- Sterling Bank of Asia Savings Account
Following are the savings accounts offered by Sterling Bank of Asia:
- Solo Savings Account: You can open the account in any amount. The minimum maintaining balance required is P5,000. You earn interest when you maintain a balance of P5,000. The interest rate offered is 0.50% p.a. and it is calculated monthly. You can access the account through ATMs, Bancnetonline, Sterling Bank Online, and OTC transactions.
- Solo Dollar Savings Account: You can open dollar savings account with $100 as the opening balance. The minimum maintaining balance required is $200. You earn interest when you maintain a balance of $500. The interest offered is 0.25% p.a. and it is calculated on a monthly basis.
- Solo Yuan Savings Account: You can open a Yuan account with CNY2,500 as the opening balance. The minimum maintaining balance required is CNY2,500. You earn interest when you maintain a balance of CNY2,500. The interest offered is 0.15% p.a. and it is calculated on a monthly basis.
Savings Account for OFWs
If an Overseas Filipino Worker wants to start investing or start an online business, he or she will require a savings account to help facilitate the transaction. It is not affordable for an OFW to open regular savings account in the Philippines as a higher minimum maintaining balance has to be maintained. The affordable savings accounts that can be opened by an OFW are as follows:
- PNB OFW Peso Account:
This account offers zero maintaining and opening balance. You can earn interest on balances of P10,000 and up. You can save money when you are living abroad. You can access the funds through ATM services offered via PNB, BancNet, MegaLink, and ExpressNet. You will not be charged any dormancy fee.
- BDO Kabayan Savings:
With this account, you can remit money to your family members. Only P100 initial deposit is required. There is no minimum maintenance balance required with 1 remittance in a year. Remitters will get a free life and accident insurance. You can earn BDO Rewards points from savings and remittance. If there is no remittance then the account will be converted to a regular account which requires you to maintain a balance of P10,000. You can also build your credit history with the bank as it is easier to apply for a home loan, car loan, or a business loan.
- BPInoy Savings:
BPInoy Savings account lets you safely remit the finances to your account. There is no initial deposit required and there is no maintaining balance required as long as there is a remittance every 3 months. You can access the funds in your account through the ATMs. You can enjoy cashless shopping through Express Payment System. You can open the account online from anywhere in the world. You can monitor the funds, pay bills, transfer money, and recharge your phone, through the ATMs, phone banking, online banking, and mobile banking.
- UCPB’s U-Remit ATM Savings:
U-Remit is an easy, hassle-free, and affordable remittance service offered by UCPB. You can safely transfer money and there are convenient pick-up points and payment outlets.
- Metrobank OFW Peso Savings Account:
This is a basic savings account which offers you interest on the amount available in the account. The foreign currency that is remitted is converted to pesos and your family members will have no hassle of changing the currency. The account can be tracked through a passbook. There is no initial deposit or maintaining balance required. Maintaining balance is not required provided you remit one transaction per year. You earn an interest of 0.25% p.a. You will need to have a balance of P10,000 to earn interest.
How to Open a Savings Accounts?
You can open the savings account through the following ways:
- At the Bank:
You can open a savings account by going to the nearest bank branch. You are required to bring the documents required. You can fill out the application form and submit it to the bank. You must provide the initial deposit amount you are depositing. You will then have to wait for a day or two for the account to be activated. Once the account is activated, you can enrol for the online and phone banking feature.
Some banks allow you to open the account online as well. You must have the necessary documents with you so you can upload them as necessary.
- Download the application form and submit it to the bank:
You can also download the application form from the bank’s website and then go the bank and submit it. You can get all your queries clarified when you are at the bank.
How is Savings Accounts Different from Checking Account?
Before you open an account, you must know the type of account that suits your requirements. A savings account should be opened if you want to save money and invest. You get debit cards, and the interest is calculated on a daily basis. You can access the funds through net banking, mobile banking, phone banking, or ATMs. An individual or Agencies can open a savings account. Current or Checking account should be maintained with a commercial bank and you can opt for payment on standing instructions, overdraft facility, transfers, direct debit, etc. There is no limit on the amount of deposits and withdrawals made. This is ideal for an organization that needs to transfer money frequently. Firms, companies, HUFs, etc. can open this account.
Following are the major differences between checking and savings account:
|Particulars||Savings Accounts||Checking Account|
|Purpose||To accumulate money to save for future financial requirements.||To help manage your money on a daily basis.|
|Payment||The medium of payment is limited, you can make the over-the-counter withdrawal or use the debit card.||The medium of payment is diverse, you can use ATMs, debit cards, over-the-counter withdrawal, or electronic debit.|
|Transactions||There will be a limitation on the number of transactions you can make in a month.||There is no limitation on the number of transaction you can make.|
|Earnings||You will earn an interest, but it is lower than what you earn on other types of interest.||You will not earn any interest.|
|Fees and charges||Monthly maintenance fee, minimum balance, and annual fees will be charged.||Minimum balance should be maintained. You will be charged ATM usage fee, online access fee, fee for cheque book facility, and for overdraft protection.|
|Overdraft facility||Not allowed.||You will get an overdraft facility.|
|Passbook||Passbooks will be provided by the banks.||Passbook will not be issued by the banks.|
|Opening balance||You require a less amount to open a savings account.||You will require a high amount to open a checking account.|
You will have to submit the following documents along with the application form:
- Foreigners will have to submit their passport and Alien Certificate of Registration or Immigrant Certificate of Registration.
- Locals will have to submit their National identity card.
- Rental contract or recent utility bills for address proof.
- Passport sized photographs.
- Minimum deposit amount required. Some banks do not have a minimum deposit requirement.
- Proprietors should submit Mayor’s permit, and Certificate of Registration with DTI.
- Partnership firms should submit the Articles of Partnership, Certificate of Registration with SEC, and a notarized agreement designating the extent of the authority of the partners.
- Corporations should submit Certificate of Registration, Articles of Incorporation, with SEC, General Information Sheet, Notarized Certificate of Corporate Secretary and Certificate of Registration with the appropriate government agency.
How to Choose the Best Savings Accounts?
When you are opening a savings account, the main intention is to save. When you put the money in the savings account, you will earn interest and the money will grow faster. You must consider the following:
- The reputation of the bank is important. The bank must offer a quality service.
- The initial deposit amount required. While some banks don’t need you to have any initial deposit amount, some will need it. You must compare and choose the one that suits your requirements.
- The minimum maintaining balance required is another criteria you must look into. Some banks need you to have minimum balance while some don’t. If you do not maintain the balance when required, you will get charged. You must read the fine print to choose the right account.
- The interest rate offered should be the next criteria you must look into. Though the interest offered is low when compared to other investment options, you can shop around and find a bank that offers a slightly higher rate of interest.
- Fees and charges will be charged by the banks for availing the services. Some banks will charge the monthly maintenance fee, annual fees, a fee for failure to maintain the minimum balance etc. You will need to read the fine print and look out for these fees. Then choose a bank that doesn’t charge a high fee.
It is important that you read through the fine print and find out more about the fees and charges and other terms and conditions. If you have any queries, get them resolved with the bank representative.
Things you must consider while opening a savings account
When you are opening a savings account, you must ask the following questions to make sure that you are getting the best benefits and are aware of the charges:
- You must enquire about the interest rate. You must know how much interest you can earn with each account. You can compare and find the best options that help you meet your savings target sooner.
- You must know how much minimum balance you must maintain. Each savings account has a different requirement. It usually ranges from P10,000 – P15,000.
- You must know if online banking facility will be provided. Online banking is convenient and it will help you to monitor your account and initiate transactions.
- You can also ask if the bank will provide a debit card with free purchase protection and insurance.
- You must check the number of Bank ATMs available around your residence and area of work or the place you frequently visit.
- You must check the quality of service offered by the bank. If most of the services are offered on the bank’s mobile app or the bank’s website, you need not visit the bank. But, if there are certain services that require you to visit the bank, you must know if the bank offers prompt services.
- You should also know the service charges applicable to the services availed.
Savings Accounts FAQs
- Will I be charged a penalty for making any withdrawals?
No, you will not be charged a penalty for withdrawals. But, the banks set a limit on the number of withdrawals you can make in a month.
- Is the amount deposited insured?
Yes, the amount deposited in the savings account is insured up to P500,000 per individual.
- How can I access the funds from their savings account?
You can access the funds through ATMs, over-the-counter, internet banking, and phone banking.
- What is the purpose of opening a savings account?
The purpose of opening a savings account is to accumulate money to save for future financial requirements.
- Is overdraft facility offered with my savings account?
No, overdraft facility is not offered with your savings account.