Exploring the finest savings account options in the Philippines is essential, as numerous banks extend this service to customers. Determining which ones stand out as the best is pivotal.
The significance of selecting the right bank account cannot be overstated, given the potential for earning passive income.
This article will delve into the merits of considering a high-yield savings account as a worthwhile investment opportunity.
Make sure you don’t overlook it:
Top 10 Online Loan In Philippines – Only ID Card Required
Update 09/2023
(Online Loan Application)
|
What is a savings account?
A savings account is a fundamental financial product available through banks, cooperatives, and various financial institutions.
This account serves as a secure repository for your funds, allowing both deposits and flexible withdrawals at your convenience.
Furthermore, it benefits from insurance coverage provided by the Philippine Deposit Insurance Corporation (PDIC), safeguarding deposits of up to half a million pesos while also accruing modest interest over time.
The function of a savings account
A savings account in the Philippines serves multiple purposes, making it a versatile financial tool.
Firstly, it provides a secure place to store spare cash that isn’t immediately needed for day-to-day expenses. This makes it an ideal choice for building an emergency fund.
Additionally, a savings account is an effortless means of generating passive income and a simple form of investment, thanks to the interest it accrues over time.
Compared to traditional piggy banks, it offers the advantage of interest earnings, and it also protects your money from wear and tear. Plus, older bills, which may no longer be exchangeable, can find a safe home in a savings account.
The convenience of an ATM card provided by the bank ensures easy access to your funds, reducing the need to carry cash.
However, there are some downsides to consider. The accessibility of funds in a savings account can tempt you to spend your savings impulsively. Moreover, the interest earned on these accounts is often minimal, making it challenging to outpace inflation over time.
For long-term wealth preservation and growth, individuals may explore alternative income-generating opportunities such as index funds, UITFs, or mutual funds.
Lastly, there are specialized savings accounts designed exclusively for kids, offering competitive rates and potential perks like insurance or educational benefits. These can be a smart choice for parents looking to secure their children’s financial future.
Benefits of a savings account
Savings accounts offer numerous benefits to depositors:
- Small Initial Balance: You can start with as little as ₱500, making it accessible to most individuals.
- Low Maintaining Balance: Many accounts have minimal balance requirements to avoid fees.
- Low Maintaining Balance to Earn Interest: Interest is earned when you maintain a certain deposit level, with earnings credited every three months.
- Easy Setup: Opening an account is straightforward, with clear instructions and easy-to-obtain documents.
- Safekeeping: Banks secure your money, ensuring you can access it whenever needed.
- Currency Exchange: Banks provide current bills, preventing the issue of retired currency.
- Liquidity: You can withdraw funds quickly.
- Convenience: Transactions are easy through physical branches, email, phone, or online access.
- Interest Earnings: Your money earns modest interest, unlike cash stored physically.
- Deposit Insurance: Up to ₱500,000 is insured by the Philippine Deposit Insurance Company, safeguarding your deposits.
- Financial Goals: Savings accounts are useful for accumulating funds for significant purchases.
- Bank Services: Accounts may offer additional services, such as using your ATM card for online purchases and cashless transactions.
Factors to Consider When Choosing the Best Banks in the Philippines
When selecting a bank for your account, consider these key characteristics:
- History: Established banks often have more credibility due to their long history.
- Financial Products: Examine the range of financial products they offer, such as ATM, passbook, or checking accounts, as they can vary significantly.
- Location: Opt for a nearby branch for convenient access to services and transactions.
- Services: Check for online access, ATM availability, and other essential services.
- Customer Care: Choose a bank known for caring about its clients and their well-being.
- Perks and Benefits: Explore account perks like online transactions, rewards cards, and competitive interest rates to make an informed choice.
Characteristics of a savings account
A standard savings account exhibits the following attributes:
- Interest: It accrues interest, typically paid every three months.
- Initial Deposit: This represents the minimum amount required to open an account, though some accounts may not necessitate an initial deposit.
- Maintaining Balance: A minimum balance must be maintained in the account; falling below this threshold can result in fees.
- Required Balance for Interest: Some savings accounts only grant interest if you maintain a specified deposit level.
- Withholding Tax: The interest earned may be subject to a 20% tax, although certain accounts may waive this tax under specific conditions.
Additionally, fees may be applicable in the following scenarios:
- Withdrawing funds from other branches, other banks, or over the counter (for ATM accounts), or within a specific time frame (e.g., within the first 30 days).
- Making deposits in a branch other than the one where the account was opened.
- Replacing a lost passbook or ATM card.
- Allowing the balance to drop below the required maintaining balance.
- Maintaining a dormant account.
PDIC-insured
Savings accounts in the Philippines come with the assurance of insurance, making them a secure and low-risk choice.
The Philippine Deposit Insurance Corporation (PDIC) safeguards deposits and accounts, protecting them against potential bank crises.
In the event of a bank’s insolvency, the PDIC intervenes to ensure depositors receive their funds back.
As long as your total deposits and accounts amount to half a million pesos or less, you can rest assured that your money is well-protected.
Which types of accounts receive insurance coverage?
PDIC coverage includes the following account types: savings, special savings, demand/checking, negotiable order of withdrawal, and negotiable/non-negotiable certificate of time deposits.
Insurance protection is applicable to single accounts, joint accounts, and accounts held in trust for another person (ITF). Additionally, these accounts can be maintained in either peso or dollar denominations.
Top Best Bank In The Philippines With High Interest
Here are the Philippines’ top 10 high-yield savings accounts, ranked by their latest interest rates, from the highest to the lowest.
Next, we’ll compare these accounts by calculating your potential earnings after one year and ten years, before taxes. For this analysis, we’ll assume an initial deposit of ₱100,000, as some accounts have this requirement.
| NAME | INTEREST | 1 YEAR LATER |
|---|---|---|
| ING Savings Account | 2.5% | 2,500.00 |
| GSave by CIMB Phlippines | 2.6% | 2,600.00 |
| Citibank Peso Bonus Saver Account | 1.66% | 1,660.00 |
| BDO Optimum Savings Account | 1.25% | 1,250.00 |
| Security Bank eSecure Savings Account | 0.70% | 700.00 |
| BPI Family Savings Bank Advance Savings Account with Passbook | 0.625% | 625.00 |
| Security Bank Premium Build Up Savings Account | 0.074% | 74.50 |
| Sterling Bank of Asia Bayani OFW Savings Account | 1.00% | 1000.00 |
| Citibank e-Savings Account | 0.75% | 750.00 |
| BPI Advance Savings account with Passbook | 0.0625% | 62.50 |
| Citibank Peso High Rate Saver | 0.70% | 700.00 |
| Equicom ATM Savings Account | 0.125% | 125.00 |
If you don’t currently have ₱100,000, there’s no need to worry. Our comparison focuses on the growth of your money over time using the same deposit amount, ensuring an apples-to-apples comparison.
As you can observe, the disparity in interest rates offered by different banks can significantly impact your earnings in both the short term and long term. For instance, GSave by GSave yields ₱2,600 after one year, while the lowest option provides only ₱74.50. That’s a difference of over 40 times.
Similarly, over a decade, Citibank accrues ₱26,000.00 in interest, whereas the last-ranked option only generates ₱625.00. This underscores the substantial impact your choice of banking product can have on your financial growth.
Below is a summary of all the reviewed products in this article, each linked to its respective discussion point, concluding with a savings forecast.
CIMB Bank GSave
CIMB Bank’s GSave account offers an annual interest rate of 2.6% on a maximum cumulative deposit of ₱50,000, with interest credited at month-end. To open this account, you must be at least 18 years old, possess a valid government-issued identification card, and be a verified GCash user.
Notably, the account has a one-year validity. If you wish to continue and deposit more than the maximum amount, you’ll need to download the CIMB Bank app and link your GSave account.
Furthermore, the account includes free life insurance, equal to 1x the average daily balance of the past three months or 1x the last recorded balance before the date of death, with coverage of up to ₱1 million.
- Initial deposit: Any amount
- Balance to earn interest: Any amount
- Interest rate: 2.6%
The table below provides an estimate for a GSave account with no limits on the deposit amount and validity.
| YEAR | MONTHLY | BALANCE |
|---|---|---|
| 1 | 7,336.07 | 89,224.43 |
| 2 | 7,336.07 | 180,686.95 |
| 3 | 7,336.07 | 274,443.70 |
| 4 | 7,336.07 | 370,552.23 |
| 5 | 7,336.07 | 469,071.53 |
| 6 | 7,336.07 | 570,062.07 |
| 7 | 7,336.07 | 673,585.85 |
| 8 | 7,336.07 | 779,706.40 |
| 9 | 7,336.07 | 888,488.86 |
| 10 | 7,336.07 | 1,000,000.00 |
Citibank Peso Bonus Saver Account
The Citibank Peso Bonus Saver Account rewards you for saving more each month with an interest rate ranging from 0.60% to 1.66%. You can make unlimited, free withdrawals.
- Initial deposit: ₱50,000
- Balance to earn interest: ₱50,000
- Base interest: 0.60%
- Bonus interest: Up to 1.66% for monthly balance increases of ₱5,000 or more.
- Interest reverts to 0.60% for no balance increase or reaches 1.08% with consistent monthly increases of ₱5,000 for six months, provided the balance is less than P4 million. For balances of P4 million or higher, the maximum interest is 1.66%.
Now, let’s calculate how much you need to save in a Citibank Peso Bonus Saver Account to reach P1 million after 10 years.
The approach involves an initial deposit of ₱50,000 in the first month, followed by ₱5,000 savings for each of the remaining 11 months in the first year. From the second year onwards, a monthly savings of at least ₱7,710.48 is necessary. (In the table, “Year-End” represents the amount saved by the end of each year, while the “Balance” column encompasses the interest earned during that year.)
| YEAR | MONTHLY | YEAR-END | BALANCE |
|---|---|---|---|
| 1 | 50,000 (initial) 5,000.00 | 105,000.00 | 105,777.36 |
| 2 | 7,702.94 | 198,212.64 | 200,255.99 |
| 3 | 7,702.94 | 290,647.93 | 295,919.17 |
| 4 | 7,702.94 | 383,083.21 | 392,781.75 |
| 5 | 7,702.94 | 475,518.50 | 490,858.77 |
| 6 | 7,702.94 | 567,953.78 | 590,165.44 |
| 7 | 7,702.94 | 660,389.07 | 690,717.19 |
| 8 | 7,702.94 | 752,824.35 | 792,529.63 |
| 9 | 7,702.94 | 845,259.64 | 895,618.57 |
| 10 | 7,702.94 | 937,694.92 | 1,000,000 |
BDO Optimum Savings Account
The BDO Optimum Savings Account offers higher interest rates as you deposit more, permitting up to three free monthly withdrawals.
- Interest: 1.25%
- Initial deposit: ₱30,000
- Balance to earn interest: ₱30,000
Fees include:
- ₱300 for account closure within the first 30 days
- ₱300 for falling below the minimum average daily balance
- ₱30 for dormant accounts over five years
- ₱110 for exceeding three monthly withdrawals.
To accumulate one million pesos in ten years with a 1.25% interest rate, you would need to save ₱7,914.23 per month. Here’s a breakdown.
| YEAR | MONTHLY | YEAR-END | BALANCE |
|---|---|---|---|
| 1 | 7,914.23 | 94,970.74 | 95,565.79 |
| 2 | 7,914.23 | 189,941.47 | 192,090.83 |
| 3 | 7,914.23 | 284,912.21 | 289,584.74 |
| 4 | 7,914.23 | 379,882.95 | 388,057.25 |
| 5 | 7,914.23 | 474,853.68 | 487,518.19 |
| 6 | 7,914.23 | 569,824.42 | 587,977.48 |
| 7 | 7,914.23 | 664,795.16 | 689,445.13 |
| 8 | 7,914.23 | 759,765.89 | 791,931.26 |
| 9 | 7,914.23 | 854,736.63 | 895,446.11 |
| 10 | 7,914.23 | 949,707.37 | 1,000,000.00 |
Security Bank eSecure Savings Account
Security Bank Corporation’s eSecure Savings Account offers tiered interest rates based on your balance, with higher savings leading to increased interest.
- Interest: Up to 0.70%
- Initial deposit: ₱500
- Balance to earn interest: ₱5,000
You only need a ₱500 initial deposit, and balances of ₱5,000 or more earn a starting interest of 0.70%. However, keep in mind that only one withdrawal per month is allowed; otherwise, the interest drops to 0.10%.
To gradually save one million pesos, start with a deposit of ₱100,000 to earn 1.10% interest. Then, save ₱7,149.62 monthly for ten years. The table projection illustrates how your funds will grow over time.
| YEAR | MONTHLY | YEAR-END | BALANCE |
|---|---|---|---|
| 1 | 100,000 (initial) 7,149.62 | 185,795.42 | 186,488.33 |
| 2 | 7,149.62 | 271,590.84 | 273,738.82 |
| 3 | 7,149.62 | 357,386.26 | 361,758.19 |
| 4 | 7,149.62 | 443,181.68 | 450,553.23 |
| 5 | 7,149.62 | 528,977.10 | 540,130.77 |
| 6 | 7,149.62 | 614,772.52 | 630,497.73 |
| 7 | 7,149.62 | 700,567.94 | 721,661.08 |
| 8 | 7,149.62 | 786,363.36 | 813,627.83 |
| 9 | 7,149.62 | 872,158.79 | 906,405.09 |
| 10 | 7,149.62 | 957,954.21 | 1,000,000.00 |
BPI Family Savings Bank Advance Savings Account with Passbook
The BPI Family Savings Bank Advance Savings Account with Passbook offers faster returns on your deposits. It boasts a higher interest rate than regular savings accounts, reaching up to 1.50% for balances of a million pesos or more.
- Interest: 0.625%
- Initial deposit: ₱100,000
- Balance to earn interest: ₱100,000
Maintaining a balance of ₱100,000 is essential to earn interest; otherwise, the account remains dormant. Monitoring the account is easy through their online banking portal.
For those aiming to accumulate one million pesos in ten years, start with an initial deposit of ₱100,000 and save ₱7,180.96 monthly. The table below provides a projection of the BPI Family Savings Bank Advance Savings Account with Passbook.
| YEAR | MONTHLY | YEAR-END | BALANCE |
|---|---|---|---|
| 1 | 100,000 (initial) 7,180.96 | 186,171.53 | 186,803.25 |
| 2 | 7,180.96 | 272,343.05 | 274,301.80 |
| 3 | 7,180.96 | 358,514.58 | 362,501.24 |
| 4 | 7,180.96 | 444,686.11 | 451,407.19 |
| 5 | 7,180.96 | 530,857.64 | 541,025.30 |
| 6 | 7,180.96 | 617,029.16 | 631,361.30 |
| 7 | 7,180.96 | 703,200.69 | 722,420.95 |
| 8 | 7,180.96 | 789,372.22 | 814,210.03 |
| 9 | 7,180.96 | 875,543.75 | 906,734.42 |
| 10 | 7,180.96 | 961,715.27 | 1,000,000.00 |
Security Bank Premium Build Up Savings Account
Security Bank Corporation’s Premium Build Up Savings Account is ideal for those seeking better interest rates than traditional savings accounts without being locked into a fixed term. It starts with an initial deposit of P50,000 and offers an interest rate of 0.74%.
- Interest: 0.74%
- Initial deposit: ₱50,000
- Balance to earn interest: ₱50,000
This account allows three withdrawals per quarter and suits individuals looking to accelerate their wealth accumulation over the long term.
To save one million pesos in ten years, follow the same strategy as the previous example: start with an initial deposit of ₱50,000 and save ₱7,588.87 monthly. The table below illustrates how your savings will grow over time.
Sterling Bank of Asia Bayani OFW Savings
The Sterling Bank of Asia Bayani OFW Savings account caters to Filipinos working abroad, offering a relatively high interest rate, no required initial deposit, and an included ATM card.
- Interest: 1.00%
- Initial deposit: Not required
- Balance to earn interest: ₱2,000
This account is perfect for individuals who plan to remit money from overseas, as funds can be easily credited to the account via various methods like iRemit Global offices, wire transfers, or telegraphic transfers from foreign banks.
To grow your savings to one million pesos in ten years with the Sterling Bank of Asia Bayani OFW Savings account, you should consistently save at least ₱7,996.78 every month. The table below provides a deposit projection.
| YEAR | MONTHLY | YEAR-END | BALANCE |
|---|---|---|---|
| 1 | 7,996.78 | 95,961.32 | 96,442.09 |
| 2 | 7,996.78 | 191,922.64 | 193,658.03 |
| 3 | 7,996.78 | 287,883.96 | 291,654.03 |
| 4 | 7,996.78 | 383,845.27 | 390,436.36 |
| 5 | 7,996.78 | 479,806.59 | 490,011.32 |
| 6 | 7,996.78 | 575,767.91 | 590,385.27 |
| 7 | 7,996.78 | 671,729.23 | 691,564.62 |
| 8 | 7,996.78 | 767,690.55 | 793,555.85 |
| 9 | 7,996.78 | 863,651.87 | 896,365.45 |
| 10 | 7,996.78 | 959,613.18 | 1,000,000.00 |
Citibank e-Saving Account
Citibank’s e-Saving Account offers a high interest rate and online account management convenience. Additionally, you can enjoy free and unlimited fund transfers to other users’ Citibank CASA accounts.
- Interest: 0.70%
- Initial deposit: Not mentioned
- Balance to earn interest: ₱100,000
You’re entitled to two free withdrawals per month, with a fee of ₱20 for non-over-the-counter and P30 for over-the-counter withdrawals beyond that limit.
To achieve a million pesos in savings within ten years with a Citibank e-Savings Account, you can start with a deposit of ₱100,000 to earn interest and then save ₱7,259.76 monthly, as demonstrated in the table below.
| YEAR | MONTHLY | YEAR-END | BALANCE |
|---|---|---|---|
| 1 | 100,000 (initial) 7,259.76 | 187,117.14 | 187,594.32 |
| 2 | 7,259.76 | 274,234.28 | 275,714.71 |
| 3 | 7,259.76 | 361,351.42 | 364,364.34 |
| 4 | 7,259.76 | 448,468.56 | 453,546.39 |
| 5 | 7,259.76 | 535,585.71 | 543,264.05 |
| 6 | 7,259.76 | 622,702.85 | 633,520.55 |
| 7 | 7,259.76 | 709,819.99 | 724,319.13 |
| 8 | 7,259.76 | 796,937.13 | 815,663.04 |
| 9 | 7,259.76 | 884,054.27 | 907,555.56 |
| 10 | 7,259.76 | 971,171.41 | 1,000,000.00 |
BPI Advance Savings Account with Passbook
The BPI Advance Savings Account with Passbook offers a swift return on your deposit and a higher interest rate compared to a regular savings account, with the added benefit of earning interest in advance for each deposit and efficient online account management.
- Interest: 0.0625%
- Initial deposit: ₱100,000
- Balance to earn interest: ₱100,000
Maintaining a balance of a million pesos or more boosts the interest rate to 1.25%, instead of the base rate of 0.75%.
To become a millionaire using the BPI Advance Savings Account with Passbook, consider an initial deposit of P100,000, followed by monthly savings of ₱7,259.76 for the next ten years. The sample projection aligns with the previous table for the Citibank e-Savings Account, which can be referenced.
Citibank Peso High Rate Saver Account
Citibank’s Peso High Rate Saver Account offers market-leading interest rates ranging from 0.70% to 0.85%, with higher balances resulting in increased interest earnings. This account has no fixed terms, allows balance inquiries at over 13,000 ATMs worldwide, and offers online account management.
- Interest: 0.70%
- Initial deposit: Not mentioned
- Balance to earn interest: ₱100,000
You’re entitled to two free monthly withdrawals. Non-over-the-counter withdrawals incur a ₱20 fee, while over-the-counter withdrawals have a P30 fee.
To achieve one million pesos in a decade with the Citibank Peso High Rate Saver Account, consider an initial deposit of ₱100,000 and monthly savings of ₱7,275.60, as detailed in the table below.
| YEAR | MONTHLY | YEAR-END | BALANCE |
|---|---|---|---|
| 1 | 100,000 (initial) 7,275.60 | 187,307.18 | 187,753.18 |
| 2 | 7,275.60 | 274,614.36 | 275,998.23 |
| 3 | 7,275.60 | 361,921.55 | 364,737.90 |
| 4 | 7,275.60 | 449,228.73 | 453,974.96 |
| 5 | 7,275.60 | 536,535.91 | 543,712.21 |
| 6 | 7,275.60 | 623,843.09 | 633,952.45 |
| 7 | 7,275.60 | 711,150.27 | 724,698.50 |
| 8 | 7,275.60 | 798,457.45 | 815,953.21 |
| 9 | 7,275.60 | 885,764.64 | 907,719.42 |
| 10 | 7,275.60 | 973,071.82 | 1,000,000.00 |
Equicom ATM Savings Account
The Equicom ATM Savings Account offers a 0.50% annual interest rate, with a low initial deposit of ₱2,000 and a ₱5,000 balance requirement to earn interest. This account includes an ATM/debit card that can be used for withdrawals at Equicom, BancNet, Expressnet, Megalink, and VisaPlus ATMs, which may incur fees.
- Interest: 0.125%
- Initial deposit: ₱2,000
- Balance to earn interest: ₱5,000
Withdrawal limits are ₱25,000 per transaction and ₱50,000 per day. You can conveniently manage your account through their online banking services.
With no hefty initial balance requirement, you can gradually build your savings with a modest deposit. For instance, saving ₱8,163.78 each month for ten years through the Equicom ATM Savings Account can lead to one million pesos. Refer to the table below for the projection.
| YEAR | MONTHLY | YEAR-END | BALANCE |
|---|---|---|---|
| 1 | 8,163.78 | 97,965.35 | 98,210.51 |
| 2 | 8,163.78 | 195,930.71 | 196,814.45 |
| 3 | 8,163.78 | 293,896.06 | 295,813.40 |
| 4 | 8,163.78 | 391,861.41 | 395,208.95 |
| 5 | 8,163.78 | 489,826.76 | 495,002.66 |
| 6 | 8,163.78 | 587,792.12 | 595,196.16 |
| 7 | 8,163.78 | 685,757.47 | 695,791.03 |
| 8 | 8,163.78 | 783,722.82 | 796,788.88 |
| 9 | 8,163.78 | 881,688.17 | 898,191.33 |
| 10 | 8,163.78 | 979,653.53 | 1,000,000.00 |
Step-by-step How to open a savings account
Opening a savings account involves a few straightforward steps:
Step 1: Research
Start by gathering information about savings accounts, which you’ve already begun by reading this article. Consider exploring additional sources such as PDIC and Bangko Sentral ng Pilipinas.
Step 2: Choose a Bank
Select a bank with a strong history of stability for your deposits.
Step 3: Select a Product
Once you’ve chosen a bank, pick a deposit product that aligns with your needs. Decide whether you require an ATM card, plan to use cashless payments, or prefer a passbook.
Step 4: Prepare Documents
Research the necessary paperwork, which can typically be found on the bank’s website or by visiting a branch. Required documents often include an initial deposit, identification cards, proof of billing, and other relevant files.
Step 5: Open the Account
Visit your chosen bank to open the account. The application process usually requires just one visit. Inquire about the possibility of opening an online account if needed.
Step 6: Await Card or Passbook Issuance
Some banks issue ATM cards or passbooks immediately, while others may require you to return after a specified waiting period.
Step 7: Enjoy
Once your account is active, you can begin using the provided services. Use your ATM card at nearby machines or your passbook at the branch that suits you best.
Conclusion
To identify the best banks in the Philippines that suit your requirements, narrow down your options by reviewing bank websites, reaching out to their hotlines, and gathering details about their offerings. Once you’ve made your bank selection, proceed to choose the appropriate type of bank account.
