Creating a savings account in the bank of your choice is the most common type of investment. It seems you have your own account too but this article serves just as a refresher.
WHAT IS A BANK SAVINGS ACCOUNT?
From my own assessment, this is the most convenient, easiest, most accessible, and safest and the most commonly used type of investment. Savings deposit lets you park your money in the bank and you can even withdraw anytime you want.
HOW TO INVEST IN SAVINGS ACCOUNT?
Just inquire at any bank of your own choice and then the bank personnel will let you decide what product you want to put your savings in. Common among all banks is that they offer a checking savings account, an ATM account or a passbook account. These don’t have much differences but only in the manner of transactions and by your purpose. If you have a business and you have lots of transactions, then try checking account. If you are fond of transacting online or you want the most accessible way to deposit and withdraw your money, go for an ATM account.
If your purpose is to put your money safely in a bank and you never want to touch it, don’t go for ATM because anytime you may be tempted to withdraw your money at any teller-machines, especially if you are attracted to the huge sale discounts the mall offers. Go for Passbook account if you really want your money not to be withdrawn easily. These are just my suggestions but you can still choose what you want to have.
For the requirements, just get one valid ID, your Tax Identification Number (TIN) ID, a proof of billing (bills not named after you is accepted as long as the address of the bill is where you also reside) and a deposit for your minimum maintaining balance. Minimum deposit varies because it depends on the product and the bank you chose. Based on my experience, the lowest minimum deposit I encountered is just Php 100.00.
After submitting all the requirements, you’ll be filling up an application form and then you’ll have to wait for your account to be processed.
HOW WILL IT WORK?
Similar to time-deposit account, interest rates are low. Major commercial banks are the best place to apply for a savings account because of it’s the safest parking space but they offer the lowest interest rate. Annual rates are less than 1% so if you have a Php 10,000.00 balance in your account, additional income is only at Php 50.00 to 100.00 per year. That’s at less than 30 centavos per day. Rural banks offer higher yields but it will not again defeat inflation rate.
The rule for putting in and getting out of your money in savings account is not much strict. The only thing you have to remember is to maintain the required balance of the bank. It is called “maintaining balance.” if you do not reach the maintaining balance, there is a penalty that will be deducted from your account.
!! INVESTOR ALERT!!
While savings account may be considered as an investment despite of its very minimal return, don’t put all your money in this account. As much as possible, treat this investment for your emergency savings or for your accessibility when the need arises.Savings account is like a wallet with money but also with an added security benefit.
IS INVESTING IN SAVINGS ACCOUNT RIGHT FOR YOU?
My answer to this is very similar to time-deposit account but add to that is in reserving an emergency or necessity fund of your own. Beside the fact that parking your money in bank prevents you from spending into the unnecessary, it also gives you insurability to your money. Imagine if you have a Php 100,000.00 pure cash kept in the cabinet of your bedroom. What if your home is robbed or it burns down? Your money may be lost forever. If the bank where you have your savings account shuts down, your money will not be lost. It will be paid by the PDIC. Thus, practically speaking, a savings account is good but not to the point of viewing it as a way of having passive income.
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Because our society has become increasingly consumerist talking to people about saving seems a stretch sometimes. However, there are those who call themselves millennial and entrepreneurs who seem to have a firm handle on the importance of saving and investing, and are lending their voices to get others to do the same.reply 0