Introduction: All About Banking
A Bank is a fundamental place where you store your money – safe, simple and convenient. Whether you’re a student, a teenager, an adult, worker, pensioner, or an owner of the business – opening an account in a Bank is one of the fundamental steps to start framing your wealth.
But why bank in the first place?
I remember, my grandma had her plastic with cash inside and put it in her clothes to keep. Sometimes, due to her old-age, she was being forgetful where her stuff was placed. For that reason, her money had gone somewhere else she couldn’t remember. Her savings was gone in the wind. Sad story.
Another one, my father is afraid (yes until now) to put all his money in a bank (although he has his bank account for his salary transfer, yet half or almost all of his salary will be withdrawn and kept it in his safety drawer inside his office). Way back in year 2013, our town got hit by a super typhoon; his office was almost blown by the strong winds and rain. Sunshine came, he saw the cash (bills) all wet and some were missing. My family assisted him in drying-up the remaining bills and started counting it back. Sad story.
What’s my point?
Is it really possible to live and revolve in today’s mundane on just a cash-only system?
Certainly, it’s still possible, however, it’s not always the best scheme. So why would you use a Bank? Here’s why?
#1 – FOR SECURITY / SAFETY
Relevant to the real-life stories above, storing up your money at home, in your office or to a 3rd party person, is not safe at all. Your office and house could be robbed, struck by flood (typhoon) or catch in fire; 3rd party person might steal and run away your money. Your money might be damaged or start to decompose or anyone in your house or who visits your house could find it and take it. Once you have more than thousands of cash in your pocket or wallet, it’s always best to place your money in a bank for safekeeping and security purpose. Anyhow, your cash in bank is insured by the PDIC (Philippine Deposit Insurance Corporation) or any applicable insurance corporation in your particular country.
#2 – FOR SAVING
Back when we were a child, we were taught by our mom and dad to save some money from our school allowance they gave to us
– through what we called “piggy bank”. Coins are kept in it.
Then at the end of the school year, summertime, we would open it and would start counting our coins, and that money could be spent for buying school supplies for the next school year, stationery, and foods we like, etc. And possible, our money from the ‘piggy bank’ will be used as our savings to open a new account to a ‘real bank’.
#3 – FOR CONVENIENCE
Banking now is very convenient especially when e-banking (online banking) has sprouted – it is user-friendly, time-saving, serviceable and makes it easier for you to transact (pay bills online, transfer money, view your statement, etc.). When you already open an account, you can check it anywhere at anytime. See, that is the power of technology. Now, there is another trend – mobile banking has also risen; you can check your bank account and transact through your mobile phone, as long as there’s your mobile data package or WiFi (internet connection). Because of innovation in technology, banking makes it convenient and easy for us to use.
#4 – FOR INVESTING
You want to start saving and investing your money in a bank to augment your financial latitude in the future. Your money grows through interest in deposits. There are lots of financial services in a bank by which you can raise your cash. You can open a savings account, current account, time deposit account, mutual funds, etc. Bankers are there always ready to assist you.
Which bank you can open an account with?
You can always choose banks that are already established more than years, decades or even centuries. Banks that has already built trust of the many, which are in the top 10 or gained biggest names in the public. Just be prudent in choosing your bank, use a grain of common sense or rationale.
As to location – choose the bank that is near to your house, or closer to work so it will be convenient for you in case you want to make withdrawals and deposits, which has ATM close to your place so you can use the facility 24/7.
As to size – there is no issue if you will have an account with your local banks, but I do suggest that you should choose national or international banks, so you’ll have an easy access to your money when you’re out of town and won’t have to pay service charges to use another bank’s ATM to access your cash.
As to legitimacy – choose large, widely-known bank. Banko Sentral ng Pilipinas was mandated by the General Banking Law to recognize legitimate banks.
As to fees – just be sure to check bank fees schedule before signing up your account opening form and be sure you also understand. Even small fees adds up over time and deducts from your account balance.
As to deposits, use, wealth and worth – you should determine what makes banking comfortable and convenient for you. Each bank has different features depending on depositor’s needs. Some bank accounts are designed for customers with large amounts of cash.
JUST choose the bank, you sensed that’s right for you.
What are the types of Bank Accounts?
- SAVINGS ACCOUNTS – provide purpose for you to save money. You can make deposits and withdrawals through passbook and ATM card, but usually you can’t write checks. But there are features now of savings passbook that is linked to your current account. Just take note of the service fees if your account falls below the maintaining balance.
- CHECKING ACCOUNTS – there are checking accounts that usually pay interest (interest-bearing). Interest rate is based on how large the balance in your account is, and most charge a monthly service fee if your balance falls below a preset level. Non-interest bearing checking accounts – the basic function is for check-writing only, they don’t earn interest and they may charge you additional fees for excessive activity, such as writing more than a certain number of checks per month.
- TIME DEPOSITS / CERTIFICATE OF DEPOSITS – “account holder has agreed to keep the money in the account for a specified amount of time, anywhere from three months to six years. Because the money will be inaccessible, the account holder is rewarded with a higher interest rate, with the rate increasing as the duration increases. There is a substantial penalty for early withdrawal, so don’t select this option if you think you might need the money before the time period is over (the ‘maturity date’).
Requirements for opening an account?
Valid IDs (government-issued ID), photos, filled-in application form, and signature cards to sign.
Absolutely, your CASH/check written under your name (Cash in Bank, beginning) – is the main requirement in account opening. The minimum amount of money required depends on the type of account you want to open.
Age requirement to open a bank account?
The legal age for an account opening in the banks should be 18 years old and above. For kids 7 years old or teens up to 17 years old can open a bank account provided that the guardian or parent should accompany them and legal guardians / parents opens them an ITF (In Trust For) account. In most countries, youth under the age of 18 are usually barred from independently opening a savings account because legally-binding contracts can only be signed by those above the age of majority, youth can be allowed to open an account only in affiliation with their guardian. It’s best to educate your child to save money at their early age.
Therefore I conclude…
Anyone can open a bank account, at any bank you preferred and you can open with one or two or even different types of bank accounts at the same time, it depends on your opening funds, usage and needs. Depositing your money in a bank is also a stepping stone towards creating your wealth and financial freedom. Teaching kids at an early age to save their money thru “piggy bank” then later deposit it to the bank is better so when they grow older, they know the importance of saving money for their future.
OFW’s can open savings account to any of the affiliated banks in the country where they worked. Philippine banks have channeled partners for account opening abroad provided you’ll submit all the required documents. They will tell you how many working days you can get your passbook/ATM with your designated new Account number – usually it takes 30 days.
There you have it! I hope that with the banking information listed above, you will now start saving and investing your money in bank/s – this is the first stride to your financial success!
Let’s spread wealth by educating everyone financially from child to aged.
LIVE SIMPLY! SAVE EARLY!