A survey by the Bangko Sentral ng Pilipinas in 2014 found that 86 percent of Filipino households do not own a bank account. The main reason? They don’t have enough money to open one.
Some of the country’s largest banks are trying to address the problem by offering savings account products that are affordable even to those with low household incomes. We looked at the product offerings of the country’s 20 largest commercial banks by assets, and found at least nine bank accounts that require a minimum initial deposit of Php500 or less. Some even require zero initial deposit.
There are three bank savings plans that do not require an initial deposit. These are China Banking Corp.’s Easi-Save Basic and Asia United Bank’s Starter Savings and Preferred Peso. Instead, these plans only require a one-time account or card fee worth Php100.
Philippine National Bank also offers TAP Mastercard, an interest-earning savings and debit account that does not require an initial deposit. However, an account fee is required which a customer can pay monthly or annually. (See table)
The deposit accounts listed in the table can be a good start to start saving money in the bank, especially since most of them require a low maintaining balance. However, for your money to actually earn interest, you’d have to put in more than the initial deposit. The minimum balance required to earn interest for these cheap savings accounts range from Php500 to Php500,000.
Apart from requiring low initial deposits, what’s good about these savings plans is that they pay interest rates that are at par with other bank products that require higher initial deposits.
For example, the Kaya Savings offered by the Bank of the Philippine Islands, which only costs Php200 and requires only Php1,000 to earn interest, has the same interest rate of 0.25 percent with the Passbook Savings, which requires Php10,000 initial deposit and minimum balance of Php25,000.
Of course, there’s a cost or trade-off for the low or zero initial deposit requirement, and this usually takes the form of a fee for getting an ATM or debit card as well as fees for over-the-counter (OTC) transactions. In the Kaya Savings’ case, the ATM/debt card fee is Php150 while the OTC fee is Php100 and ATM withdrawal fee is Php5. In contrast, its Express Teller Savings account, which requires a higher initial deposit of Php500 as well as Php3,000 average maintaining balance are no longer subjected to fees for ATM/debit card, OTC or ATM withdrawal.
Pauline Macaraeg is Entrepreneur PH's data journalist. Follow her on Twitter @paulinemacaraeg