Choosing the right bank for your savings account is one of the most important considerations in saving money. If you have not started saving money yet, then I highly consider that you do so. Saving money is one of the things that I wished I have learned earlier in life.
Most people that I know including myself use our payroll ATM account as their savings account and never bothered to open a different savings account. Keeping your money on your payroll ATM account is a risky move because your budget for spending is mixed with your savings. And for some people including myself, I always end up just spending everything in my payroll ATM.
Ever heard of the saying,Out of sight, out of mind. Click To Tweet
This is one of the reasons why maintaining a separate savings account will help you save more money. Since your savings account is not mixed with your payroll account, it would be easier to grow your savings because it’s stashed away safely in an account that you don’t often see. This is a good financial strategy for people like me who is not yet fully in control of their finances and are just starting out in saving money.
Before you open a savings account, check out his helpful guideline on How to Choose the Right Bank for your Savings Account.
Identify Your Purpose for this Savings Account
Before you open a savings account, determine first the purpose of this savings account. Some of the questions that you need to ask yourselves include:
- Will this be for emergency use?
- Are you planning to keep it in the bank for a long time?
- Are you going to use the money after a specific period of time, like after a year or five years?
- Do you need it to be very accessible at all times?
This will help you determine the right bank for your savings account. If you’re going to keep it for a long time then perhaps, you should open a Time Deposit account instead of the regular savings account. If you need it to be very accessible at all times, then perhaps you need a savings account with an ATM card.
Knowing your purpose for saving money on a separate account is the core foundation in choosing the right bank for your savings account.
Consider the Interest Rate
Aside from ensuring the safety of your hard-earned money, it would be nice to also make it grow right? And the best way to grow your money is by putting it in a savings account with the highest possible interest rate. It’s quite easy nowadays to compare the banks’ interest rates as there are so many articles and websites online that have a bank comparison webpage. But, just to be sure that you’re looking at the correct information, cross-check the data by going to the bank’s website as well.
Again, if you know your purpose for this, it would be easier to choose the right bank for your savings account. Like for example, if you intend to keep it for a long time, then you can take advantage of the high-interest rate of Time Deposit accounts. This will help you save a lot of time because you will not need to check regular savings accounts anymore as you will just check the Time Deposit rates of your short-listed banks.
Consider the Location
There are 16 cities inside Metro Manila and if your chosen bank is located in another city, far away from your work or from your house, then it would be very tedious to take care of your banking needs. Choose a bank that’s either close to your workplace or close to your home.
Sometimes, we tend to miss our monthly savings goal because we feel too lazy to go out and make the deposit to the bank.
Consider the Convenience
Most banks nowadays give online access to their customers, You can use your online access to make some transactions such as check your balance, buy prepaid loads, and make money transfers. However, in making a cash or cheque deposits, we still have to go to the bank. Some banks like BPI have a deposit machine which makes depositing money more convenient for its customers since you can now make cash deposits anytime. Some digital banks like ING can also accept check deposits via their app.
Also, consider the number of ATMs that this bank has. If your savings account needs to be very accessible at all times, then this should be once of your main consideration. Some banks like BDO have more ATMs than the other banks. And often, to minimize our bank fees, we often make sure that we only withdraw money using the ATM of our banks.
Consider the Fees
We put our money in the bank for safe-keeping and to help it grow. So make sure that you check the fees associated with keeping your money in a bank to ensure that you avoid losing money. If you’re preferred savings account is the regular savings account with ATM, then check the fees for:
- Withdrawal on Own Bank’s ATM
- Withdrawal using Other Bank’s ATM
- Balance Inquiry
As of the time of writing, I only know of one bank that does not charge for a withdrawal fee and that’s CIMB Bank Philippines.
Consider the Alternatives
If you live outside Metro Manila, and if most of your life activity just revolves around your town, then consider banking with a rural bank. There are a lot of reasons why banking with a rural can be a better option. When you bank with a rural bank, your money helps your community. Rural banks often cater to our farmers and our fisherfolks. And if you save your money with a rural bank, it becomes part of the pooled fund that gets loaned to our countryside fellowmen.
Rural banks also often have better interest rates than commercial banks and this is another good reason why you should try banking with a rural bank. Just make sure that the bank is a member of PDIC. This will cover your deposit up to P500,000.
If you also have not tried banking yet with a fully-digital bank, then consider this option as well. As of the time of writing, most fully-digital banks in the Philippines have a higher interest rate than the traditional banks. They offer a lot of add-on benefits (such as free withdrawal fee for CIMB ATM Card) as well mainly because they have a lower operational cost since they don’t have physical branches to maintain. Here’s my article about CIMB Bank Philippines if you want to learn more about it.
Consider the Additional Benefits
There are some banks that also offer additional benefits when you open a savings account with them. Some offer a credit card that has the same credit limit as your deposit and some offer free life insurances. I find it to be a great add-on benefit to have for my savings account. Just be sure to read the fine print before you sign up to make sure that you fully understand how it works. Here’s my article about Philippine Bank Deposit Accounts with Free Life Insurance, if you’re interested to learn more about it.How to Choose the Right Bank for your Savings Account Click To Tweet
These are just some of the main things that you should consider before you open a savings account. Feel free to share your tips and recommendations on the comment section below.