Do You Have A Savings Account?

It’s seems like such a simple question to ask but who really has a savings account these days? And when I mean savings account, I don’t mean just an account with a name and a number but with actually savings in it. That’s the point of a savings account anyway, right?

In an era of disposable incomes and instant gratification, the thought of savings seems lost on today’s generation. Impulse buying and consumerism has become such a trend that credit card companies are bringing in more income than ever. No savings + more debt = financial crisis.

Thinking about how to start this blog, I’ve realized that there are so many things to talk about and they’re all inter-related to each other. There are also so many issues needed to address and just thinking which one to write about first already takes a lot of time. But I think a discussion on savings and having a savings account is a good start to get this blog going.

Saving Grace

I would say that my first brush with finance was when I opened a saving account with the Parish Cooperative right beside our school. I was in high school back then and cell phones were starting to become a must-have (yes, Nokia 5110). Since I didn’t want to ask my parents for money, I said I’ll save money from my allowance. So I opened a savings account with the cooperative. I remember everything was still manual, the teller writing down entries in my passbook with a ballpen and reconcile this with their own records written on an index card. I saved anywhere from 20-100 pesos a day and in a couple of months I was able to get to 2,000 pesos, I was so proud of myself! That was around Christmas time and the 5110 was still at around 5,000 so I said to myself I was halfway there. Then my dad gave me a phone for Christmas! Now I have 2,000 pesos to spend on anything else I wanted!

Saving money is a way for us to finance something that we might need or want in the future. The other option is borrowing, which allows you to get what you want now, and pay it later, at a cost. We’ll talk about borrowing, a.k.a. debt or credit later on. But while our motives for saving are personal, the benefits of saving go beyond our own. Saving money in the bank, through a savings account, allows bank to lend money to people. The more savings accounts a bank has, the more it can lend. We can talk more about how banks operate in the future; let’s first talk about you.

Choosing Your Bank

If you’re already working, you most likely already have an ATM payroll account provided by your company. While it’s absolutely of no issue if you use your ATM account to save, there are definitely benefits in separating your ATM account from your savings account. The primary one being access. If you savings is not accessible via an ATM card, the better your success rate in saving up will be.

Choosing who to bank with is a decision that depends on multiple considerations. Primary for me would be the location of bank’s branch. The location has to be convenient to go to from your place of work or residence. You would have to be easily able to go to the bank to make deposits or withdrawals as needed. Another good idea would be to go with your existing ATM account provider and open a savings account with them. A lot of banks offer electronic facilities that allow transferring funds between accounts over the phone or online .

Another consideration are the fees charged by the bank for some transactions. Most  banks charge a fee if your balance falls below minimum, while some charge for inter-branch deposits. Check out all the fees before opening an account.

For some people, size matters. The bigger the bank network, the more they’ll likely to go with it. But take note that bigger banks would offer lower interest rates compared to smaller banks. The higher interest rates on deposits offered
by smaller banks is a tool to attract new depositors, while the low interest offered by big banks are a factor of their stability. They’re basically telling you that since they’re a big bank, you won’t risk losing your money with them because they’re less likely to go bankrupt compared to smaller banks.

Interest rate shouldn’t really be an issue if you’re opening a savings account as you won’t really be earning a lot from savings unless you save a huge amount of money, in which case your cash is better stashed elsewhere.

I hope you consider opening a savings account and build a habit of saving, for your own financial security.


About Benedict Bernabe

Benedict Bernabe, 27. Benedict has a Master's degree in Development Studies from the University of Melbourne, Australia and a Bachelor of Arts degree in European Languages, cum laude, from the University of the Philippines Diliman. He has worked with the United Nations in the Philippines as the Community Facilitator of the Community of Practice on HIV&AIDS. He worked with Standard & Poor's Capital IQ, a financial information company, as researcher, translator and quality analyst in the investment research team. Prior to this, we worked at IBM Business Services. Benedict is a certified yoga teacher.

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