One of the things you need to prepare before you leave the country is having a bank account. This is crucial since it will make sending money easier and more convenient for you and your family.
That being said, you go to a bank and tell them that you want to open a bank account. Then, you will be asked if you prefer savings or checking account. In your case, savings account is more recommended since it is easier for you to manage.
It doesn’t end there. You also have to choose if you prefer passbook, ATM card, or both. You might even be offered a Time Deposit account for higher interest rate.
The point is for ordinary Filipinos, these different bank accounts may be confusing. You also need to understand the differences to make sure that you will enjoy what each account could offer.
That being said, here are the different types of bank accounts offered in the Philippines:
This is, perhaps, the most popular type of bank account today. It is easy, convenient, and allows you to keep your money for whatever purpose.
That’s not all. Savings account is usually the first type of bank account Filipinos open because of minimal documentary requirements, lower interest rate, and low – or even no – maintaining balance. Banks also offer additional perks for OFW accounts such as zero maintaining balance and transforming the account as a remittance account.
Here’s the thing with savings account: the interest rate is lower compared to other bank products, which is usually pegged at less than one percent.
Banks offer either ATM or passbook or both every time you open a savings account. The good thing about ATM is that you have quick access to your funds anytime, anywhere. It may also be used as a debit card instead of using a credit card. The maintaining balance is low as well, so you don’t have to worry about deductions.
On the other hand, passbook accounts are more difficult to maintain since they have higher maintaining balance. Online banking may also be limited to viewing and receiving money online since banks need your passbook to update the account. Nonetheless, this is a good option for your Emergency Fund since withdrawing money means giving your passbook as well.
Many Filipinos opt not to get a checking account since it is more expensive to maintain. Plus, check payments are less preferred method of payment in most transactions, so getting one may not be recommended.
Still, you may be required to get one IF you plan to apply for a loan of any type and the lender requires post-dated checks as payments. This could come in handy for payment of other expenses like utility bills and your child’s tuition fee.
Evaluate your needs first to check if you can forego getting a checking account.
Foreign Currency Account
Foreign currency deposit account is a type of savings account that allows you to save money in different currency aside from Philippine Peso. In fact, you could open an account in US Dollar, Japanese Yen, Hong Kong Dollar, or Euro, whichever is more applicable to you. Make sure you ask your bank of choice on what currency they accept.
The good thing about having FCDA is the added security in remitting and receiving money to and from abroad.
Check out this post on why you need to have foreign currency account.
Time Deposit Account
If you have extra funds and you still don’t know where to put it without the risk of losing it, then time deposit account could be a good option for you.
Time deposit account means the bank will keep your money for one month to seven years, depending on your choice. During that time, your money earns interest, which is higher than what savings account can give.
You can put minimal amount on this but if you want to earn higher interest, then higher amount is needed.
Which among these accounts do you have?