Introduction

There are many financial institutions that offer savings accounts. But how do you pick and choose a savings account that’s right for you?


Here’s what you should know about opening a savings account:

Benefits of a Savings Account

Savings accounts provide many benefits to account holders, which include:

  • Small Maintaining Balance

Depending on where you save your money, you can easily open a savings account with as low as 500 pesos. It is helpful to check account requirements before you open your own savings account.

  • Secure Your Money

A savings account keeps your money safe and secure by storing it for you.

  • Liquid Finances

At any time, you can withdraw your money almost instantly without the need for approval. Most of the time, you only need to withdraw at the bank or go to an ATM machine to access your money.


  • Interest Over Time

Placing your money in a savings account can also yield interest, depending on where you deposit. Gaining interest over time is not possible if you only store money in a physical place.

  • Convenience

By opening a savings account, you also enjoy the various features that come with it. These features may include digital or online banking, cashless transactions, or even redeem rewards.


Features of a Savings Account

The usual savings account usually has the following features:

  • Maintaining Balance

Some savings accounts require a certain amount of money to be maintained each month. Consequences of not following the maintaining balance can range from fees to closure of the savings account.

  • Initial Deposit

This deposit is the minimum amount required to open a savings account. But there are other accounts, like micro savings accounts, which do not require an initial deposit.


  • Interest

Typical savings accounts earn interest which is usually paid within three months.

  • Minimum Balance to Earn Interest

There are some savings accounts that require a minimum balance before earning interest.

  • Subject to Withholding Tax

Interest earned by the savings account is usually subject to 20% tax. However, some savings accounts waive this feature when certain conditions are met.


Where Should You Get a Savings Account?

While experts recommend getting a high-yield savings account, the choice is ultimately up to you. Different banks have different requirements, and you should definitely take these into consideration before choosing where to open a savings account.