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Finance Lifestyle

Top 6 Things to Think About Before Opening a Bank Account

If you want to have a better handle on your finances, it’s a good idea to open a bank account. Depending on your needs, you may need a payroll account, savings account, checking account, time deposit, or all of the above. There are also joint accounts (usually for family members or business partners), as well as foreign currency accounts.

Before you open one, however, you need to consider several factors. Here are some of the most crucial questions that you need to answer:

How Accessible Is the Bank?

Nowadays, everything can be done digitally and that includes handling most of your banking needs. From checking your balance to transferring money, all it takes is a few clicks and you’re all set. In fact, some banks now allow online bank account opening. As long as you have the complete requirements, you can now sign up and open a savings account in the comfort of your own home.

The bottom line here is that you should look for a bank that makes it easy for you to access all your needs. Aside from online banking facilities and/or a mobile app, it’s also a good idea to choose a bank with nearby branches. This way, in the event that you do need to make a personal visit, it won’t be too much of a hassle to do so.

How Much Is the Minimum Initial Deposit and Maintaining Balance?

All kinds of bank accounts have a minimum initial deposit requirement. Some simple savings accounts can be opened for as low as Php 100, while time deposit accounts may require Php 25,000 or higher. You can find this information through the bank’s website or other promotional materials such as brochures or posters, and make sure to have it ready before you open the account for a smooth transaction.

Another figure you need to keep in mind is maintaining balance. For deposit accounts, this is usually the same amount required for the account to earn interest; payroll accounts and some basic savings accounts, on the other hand, often don’t have a maintaining balance. Either way, you need to keep track of your money and make sure that it doesn’t go below the required amount. Otherwise, you might pay penalties.

What Are You Going to Use It For?

As previously mentioned, there are different kinds of bank accounts and the one you need to open depends on your purpose. If you want a straightforward account where you can stash your emergency funds, a simple savings account will do. This way, you have easy access to your money.

Meanwhile, if you’re looking for an account where you can grow your money in a hassle-free way, a time deposit may be more ideal. Just pay attention to the term, because you won’t be allowed to withdraw your money from a time deposit before the specified period is over (or you’ll be charged an early withdrawal fee). If you’re going to need the money soon, you’re better off putting it in a savings account with slightly higher interest than in a time deposit.

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What Is the Interest Rate?

Most savings accounts in the Philippines have an interest rate of about ​​0.125% per annum. This isn’t a big amount, but it’s definitely better than letting your money sit at home. However, do note that some banks have “premium” savings accounts that have the same convenient features (e.g., you can withdraw money any time) but have a higher minimum initial deposit and maintaining balance.

Are There Any Fees You Have to Keep In Mind?

Many bank transactions are free of charge, including cash and check deposits, account balance inquiry online, as well as intra-bank fund transfers. However, some transactions do cost a minimal fee. These include withdrawals using an ATM of a different bank, as well as inter-bank transfers.

Banks also charge a “fall below fee” if the amount in your account doesn’t meet the minimum maintaining or average balance. For checking accounts, you should also take note of the checkbook fee when you need to order new ones. Of course, don’t forget to check the fine print or ask your account manager regarding any other fees so you don’t get caught off-guard.

Are There Any Perks or Rewards?

Aside from more convenient budgeting, there are plenty of perks you can enjoy when you have a bank account. For example, a bank may offer to increase the interest rate of your savings account if you’re able to deposit a certain amount consistently every month. You may also get discounts or earn points if you use your bank account to pay your bills or shop online.

For many bargain-loving Filipinos, perks and rewards are definitely a must for bank accounts. Make sure to look at offers from different banks to find a type of account with perks and rewards that you can maximize.

A bank account is a great financial tool that can help you manage and even grow your money. Thus, you need the right one to help you meet your goals. Answer these questions so you can find the one that perfectly matches your needs.

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