Financial Literacy

Banks, Interest rates and Diskarteng malupit.

This post is originally shared inside Traders Lounge Facebook group by Gandakoh in the hope of increasing financial literacy. This article includes some comments from TL members kind enough to share their knowledge.

Sa pagpili ng banko na paglalagyan mo ng savings iniisip mo ba ang interest rates? Malamang hindi. Ngayon turuan kita to pay close attention to its interest rates.

When choosing a bank, do you pay close attention to its interest rates? While they seem to barely make any difference, interest rates are not insignificant at all—they’re a crucial part of banking, whether you’re saving or borrowing money.

Ano ang interest rate sa savings account?
An interest rate is the percentage of your savings that determines how much the bank pays you to keep your money on deposit.

When you deposit money in your savings account, you’re lending it to the bank. Your funds are then invested through loans, credit cards, and other financial products. In return, you earn interest on your savings.

Paano kinocompute ito ng mga banks?
A = P x (1 + R ÷ n)n
WHERE:
  • A = Amount of money in the savings account after interest is paid
  • P = The principal or original account balance
  • R = Interest rate in decimal format (e.g., 0.25% = 0.0025)
  • n = Number of times the bank calculates interest in a year (e.g., interest calculated daily = 365 time periods)
Wag kalimutan na by law kailangan bawasan ng 20% final withholding tax (as mandated by the Bureau of Internal Revenue). Regular savings accounts generally earn very little interest. 

Over the past five years, average bank interest rates have ranged only from 0.685% to 1.231% annually, based on Bangko Sentral ng Pilipinas. More information here.
 
Diskarteng malupit: high-yield savings accounts in Philippines
 
Kung gusto mo e grow savings mo meron mga banks na nag ooffer ng mas mataas na interest rate.
Ito ay ING PHILIPPINES at CIMB BANK PHThey offer a whooping 4% interest rate.
 
Sample: Regular Savings Account
PHP 20,000 x 0.25% = PHP 50
PHP 50 – 20% (tax) = PHP 40 per year
 
ING Savings Account
PHP 20,000 x 4% = PHP 800
PHP 800 – 20% (tax) = PHP 640 per year
 
Regular savings accounts of most local banks require large amounts (usually PHP 2,000 to PHP 3,000) for the initial deposit and maintaining balance. To earn interest, you have to maintain an even larger amount in your account.
That isn’t the case with an ING Savings Account. There are no required minimum opening, maintaining, and interest-earning balances. You can open an online savings account regardless of how much you can afford to save.
 
As a fully digital bank, ING Philippines operates without physical branches and bank tellers, passing on the savings to clients by not charging any fees. For example, you can transfer money from your ING Savings Account to accounts with other banks for free.
 
So yan yung topic about sa banks at interest rates. Do your proper research sa mga things na namention above.
 
To further guide you here is an article about savings accounts sa Pilipinas.
 
If may additional information kayo kindly comment lang sa baba. Lets all help sa pagspread ng info sa ka Family natin.

Top comments from TL Family...

“Regarding interest rates po, try nyo rin po mga coops kasi walang withholding tax ung interest rates nila so makukuha mo ung full amount ng interest mo talaga…plus most coops have higher interest rates compared sa mga commercial banks so ur hitting 2 birds wid one stone na (higher rates and no withholding tax)..make sure lang na ang coop na sasalihan is established and stable.” 

-Nadin Marie Casipong

“Oh yes, CIMB thru GCash. Nnapansin ko from 4.1% interest rate down to 3.1% but not bad compared to banks. You can observe crediting of interest every 1st of the month via GCash.”

-Mayk Posadas

“Yes, CIMB user, legit tlga ung IR nila every month, 3% per annum na sila ngaun pero pwede nman maging 4% IR when you reach >100k deposit with life insurance pa.”

-Zarinah Shara Walanda

“ING is an investment grade bank. International bank sila, parent in Netherlands. I was privileged to be sent to Netherlands in 2018 tas I met their senior leads for trade finance, as part of my work. We deal with them everyday. Kaya nung nag open sila digital bank dito, go agad ako.
I think promo lang din ung 4% interest rate. Parang 2.5% lang ata ung magtutuloy. Dati nga may 100 rebate pa for 2 transactions per month pa sila. Natapos nung April 2020. Pero not bad pa din compared to local banks na di man lang umabot sa 1%
Also, withdrawal from ING takes 2-3 banking days depende sa local bank nyo. So you also have to consider that.”
-Ren Ramirez

“So far legit naman CIMB and ING meron ako both dun nakapasok mga emergency funds para tumubo. Insured naman ng PDIC up to 500k so safe and listed sa BSP.”

-Judith Cortez

“Tips about CIMB.
GSave Account: via Gcash App (can be linked via app) 4.1%now back to 3.1% p/a,

Fast Account /Fast Plus Account: may ATM Card ka once you upgrade the account to Plus (requires minimum accumulated deposit to avail ATM for free/delivery)

UpSave Account: High interest rate too. I remember 3% p/a. Mine started all with Gcash app. “save money” button.
Link it to CIMB app after you became “Fully Verified” sa Gcash account.

PS: Magtanim po tayo sa GCash Forest.”
-John Morris Costa

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6 Comments

  • Koning Stach

    For those with relatives in the military or police force, join any of the Savings and Loans Associations. I have an account with AMWSLAI and they give dividend payouts of about 4-5% semi-annually. I heard AFPSLAI offers even bigger returns.

  • Justin

    Hello po! Ask ko lang po regarding the maximum deposit insurance coverage of all banks in Philippines is around 500K pesos. Ibig sabihin po ba nyan dapat i-maintain ko lang na total amount ng account ko is 500K since 500K lang covered ng PDIC, or you will only receive a percentage of the total remaining balance sa bank account mo capped at 500K? Sana po maenlighten nyo po ako. Thank you in advance

  • Randi D.

    Wow this is very informative and helpful, magandang opportunity to check and pag-aralan if swak sa current situation. Again, many thanks Ms. Gandakoh for sharing this.

  • Abiel Jeuz Ibanes

    Ano po yung mga risks ng pag open ng account sa ING, since wala silang physical bank? Do they have the capability to cater customer services? Also, sa “CIMB through GCash,” guaranteed and safe po ba yung transactions and savings? Thanks po

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