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Why Do You Need to Open a Bank Account?

Do you have a bank account?

Most people would rather not have a bank account. Either they are fond of their alkansya or just want to avoid going to these institutions.

What is it with banks which makes a lot of Filipinos shun them?

According to the Bangko Sentral ng Pilipinas (BSP) 2014 Consumer Finance Survey, 86% of Filipinos do not have bank accounts. With hundreds of bank branches across the country, only 14% of adults save in banks. Why?

Why Do You Need to Open a Bank Account?


Why Pinoys do not have bank accounts?

Sometimes, it is such a wonder why a great number of Filipinos don’t have their own bank account. Let’s understand why. 

  1. Do not need a bank account.

Some of us do not feel the need to have one. Since they do not transact with banks, there is no reason to have a bank account. This may be true for a while, but later in life, you will realize the importance of saving on something more secure and sturdy than your coin bank.

  1. The bank location is far.

The Philippines has more than 7,100 islands. Though we are now in the 21st century, we must accept that not all of these islands have reachable banks. Most people in places far from banks would rather think of other immediate necessities than opening a bank account.

There are also banks that will not let a person open a bank account if the home address is out of the serviceable area. On the other hand, more banks are becoming more accommodating.

  1. Cannot manage an account

Managing a bank account is keeping it active. Most banks will close an account if it goes dormant for at least two or three months with the amount below the maintaining balance. You need to deposit any amount in the bank account from time to time. This needs discipline, but in the long run, you will realize that your savings are actually growing.

  1. Service charges are too high.

Most banks charge their clients a fee if the maintaining balance is not met. Aside from this, there are other fees you have to pay if you use some offered services. There are also some banks that charge their client for bank-to-bank money transfers and ATM withdrawals. However, these fees are not too high.

  1. Do not like to deal with banks and do not trust banks

A lot of people think that banks are very strict with money and they only deal with rich businessmen. There is also a myth that banks will just rob your money. Most people believe that banks ask for too many documents, which most Filipinos find difficult to acquire.

The truth is banks do not want risks. This is why they want to make sure of your identity and credibility. Thus, they require a lot of valid documents. However, most people have a hard time getting valid government IDs. It takes time, and it has fees too.

RELATED ARTICLE: Savings Account for Kids: Teach Your Children How to Save Money

Why you need a bank account?

Somehow, we can relate as to why Pinoys don’t own a personal account. However, it is highly advisable to get one for yourself and for you kids as well. Here are the reasons why. 

  • Earn money through savings account interest

Savings accounts have interests. You keep the money in the bank, and it grows too. If you just keep it in your coin bank, the amount will not increase unless you add to it.

  • It shows and keeps a record of the income earned by the account holder during the year.

There will be transactions that will require you to show your bank statements. Let’s say you want to go on vacation to South Korea, you need to show that you have savings in your bank. This is also true in a lot of other countries.

Need a loan? Some financing institutions require bank statements for a certain period of time. This proves you have a stable cash inflow and can handle loan repayments.

  • A savings account encourages saving habit.

When you have a savings account, gives you the motivation to keep on saving. Aside from the interest, you want to keep your extra money safe and secure. You will also want to keep your savings account active way above the maintaining balance to avoid charges.

  • You can use a Savings account to make electronic fund transfers to another account.

There will be times when you have to send money to another person. You do not have to go to remittance outlets and waste your time waiting in line. You can just ask the bank to do a funds transfer from your account.

  • A saving account also allows internet banking and online purchases and shopping.

Banks now have online services. There is no need to leave your home or work just to pay your bills in Bayad Centers. Do it with your own gadgets with online banking. Pay your bills and shop for your needs through electronic transfer.

Also, online lenders use this bank service to disburse the borrowed money to their client’s accounts. You are missing this convenience if you do not have a savings account.

  • Allows immediate access to cash

You do not have to carry your cash around or leave it unsecured at home. We have to admit pickpockets, snatchers and akyat-bahay gangs are rampant. Secure your savings by keeping them in the bank. Just carry your debit card. You can shop with it or withdraw cash from an ATM.

Savings Accounts vs Checking Accounts

Is it your first time opening a banking account? You might have heard of Savings Accounts and Checking Accounts. Don’t be confused about these two. Here’s a brief explanation of their similarities and differences. 

What is Savings Account?

A savings account is an interest-bearing deposit account held at a bank. The interest earned is usually low compared to other bank investment products. The money is easily accessible with an ATM card. However, it has a maximum of withdrawals per month. Saving accounts usually have a maintaining balance and may require a minimum amount to be opened.

What is a checking account?

A checking account is a deposit account that allows unlimited withdrawals and deposits. It can be easily accessed with checks and ATM cards. It has little to no earned interest.

What do I Need to Open a Bank Account in the Philippines?

Unlike what most people think, it isn’t hard to open a bank account. You just need the following:

  • Two valid IDs (UMID, SSS, TIN, NBI clearance, etc.)
  • Proof of Billing (Meralco, Maynilad, credit card billing statements, phone bills, etc.)
  • TIN Number
  • Some banks require 2×2 or 1×1 photos

Online Banking

Online Banking allows bank transactions over the internet and is usually secured through various measures. You can access your bank account 24/7, anywhere, unless there is a maintenance period. You can access investments, pay bills, transfer funds, and check your account balance and transaction history.

However, not all are comfortable with making financial transactions online. Many fear being a victim of fraudulent activities. You can keep your details safe by applying security measures such as constantly changing your password.

When getting a quick cash loan from Cash Mart, one requirement is having a bank account (with ATM Card) where your cash will be disbursed. If you are self-employed, having a bank account means you can have bank statements that you may use as proof of income.

Need to know more about Online Loans in Cash Mart? Visit today. Learn more about the legal moneylending company