6 Things to Consider When Choosing the Right Bank for You
By: Venus Zoleta
Published on: September 3, 2019 . Last updated: July 29, 2020 Category: Personal Finance
Choosing where to bank is a crucial decision that can make or break your finances. The right bank can help you meet your financial goal, whether it’s building your emergency fund, saving for a business, or just for safekeeping your money. But making the wrong choice can cause you a lot of stress and inconvenience, like unnecessary fees and poor customer service.
Are you switching banks or opening a bank account for the first time? You’re probably wondering what the best bank in the Philippines is. Because selecting the right bank is a personal decision, only you can tell what you want and need in a bank.
Identifying your banking needs is the first step in your search for the best banks out there, especially if you’re planning to open a bank account for your kids or your business. To do that, you need to consider these six factors when choosing the bank you can trust your money with.
Table of Contents
1. Types of Bank
The first thing to consider is the different types of banks. Banks in the Philippines can be commercial, thrift, rural, or digital. Each type of bank has its pros and cons.
Universal and Commercial Banks
Universal and commercial banks provide the widest range of financial services for individuals and businesses. Customers can deposit money, pay bills, send and receive remittances, invest, get a credit card, borrow money, and more.
Pros and Cons of Commercial Banks
Pros: Commercial banks allow customers to transact through physical locations and ATMs all over the country (Some banks even have overseas branches). These banks also have online and mobile banking channels for their customers’ convenience.
Cons: Because they serve many customers, queues in the branches of larger commercial banks can get very long. Customer service also tends to be unsatisfactory. These banks typically offer less competitive fees and interest rates compared to other types of banks.
Largest Commercial Banks in the Philippines
These are the biggest universal and commercial banks in the country based on total assets, according to data from the Bangko Sentral ng Pilipinas (BSP). This metric is an indication of a bank’s financial stability.
- China Bank
- Security Bank
Thrift banks, also known as savings banks, specialize in cash deposits. Many thrift banks in the Philippines are run by the same corporations that own commercial banks.
Pros and Cons of Thrift Banks
Pros: Thrift banks offer better interest rates than commercial banks. It’s also more affordable to open a bank account with them because of their lower initial deposit and minimum balance requirements.
Cons: Thrift banks focus on basic financial services for individuals and families—they’re not as suitable to businesses as commercial banks do. Also, their branches are fewer, though ATM transactions can be done using the ATM of their respective parent banks.
Top 10 Thrift Banks in the Philippines
Here are the leading thrift banks in the country based on BSP data.
- BPI Family Savings Bank
- RCBC Savings Bank
- China Bank Savings
- Philippine Business Bank
- City Savings Bank
- PNB Savings Bank
- Sterling Bank of Asia
- Bank of Makati
- Producers Savings Bank
Rural and Cooperative Banks
Rural banks are small banks located in the provinces that provide basic, customized financial services. They help promote the economy in rural communities by lending to farmers, for instance.
Pros and Cons of Rural Banks
Pros: Operating on a much smaller scale enables rural banks to offer personalized customer service, so they build more intimate banking relationships with customers compared to bigger banks. Rural banks also have more competitive interest rates and fees.
Cons: Financial services are limited to just the basic ones like savings and checking accounts. They’re not as varied as the product offerings of commercial banks. Rural banks are also not as accessible as the larger ones, so it could be inconvenient, especially for frequent travelers, to perform financial transactions like cash deposits and withdrawals.
Online-only or all-digital banks are an up-and-coming banking trend in the Philippines. They operate over the internet without any physical location. Most transactions (such as account opening, fund transfer, and bills payment) are performed through a mobile app.
Among the pioneers of digital banking in the country are ING Philippines and CIMB Bank.
Because of the rising popularity of digital banks, commercial banks in the Philippines have started to offer digital platforms or products with almost the same services as all-digital banks. Examples are Maybank MOVE, UnionBank EON, and PNB Savings Bank digital branch.
Pros and Cons of Digital Banks
Pros: Among all types of banks, digital banks offer the most competitive interest rates and fees. This is because they’re able to save on overhead costs from the absence of brick-and-mortar branches. They’re also more lenient when it comes to savings accounts, as digital banks typically don’t require any minimum deposit and maintaining balance.
Cons: The absence of physical branches and lack of face-to-face interaction with bank personnel may pose some challenges for customers. Depositing and withdrawing cash can be inconvenient. Customer service is limited to in-app chats and phone calls.
2. Financial Products and Services Offered
Think about your short-term and long-term financial goals, and what you need to achieve them. The best bank in the Philippines has exactly something you need right now or will need in the future.
For example, when choosing the best bank for savings account, you might want one with a low maintaining balance and/or one that yields high interest. This way, saving money becomes affordable for you.
Looking for the best bank for personal loan, auto loan, or home loan? Check for low interest rates and flexible loan terms.
If you’re trying to find the best bank for credit card, choose one that offers low interest rates, low or no annual fee, and the kind of rewards programs that suit your spending habits.
3. Bank Fees
The best bank in the Philippines is one that doesn’t charge too many and expensive fees.
Typically, banks have fees for various transactions, services, and penalties. For example, banks commonly charge a fee of at least PHP 300 for every month a customer’s account falls below the maintaining balance. There are also fees to be paid for every check encashment and over-the-counter cash withdrawal.
However, some of the major banks charge a fee per inter-regional deposit. If your branch of account is in Metro Manila and you make a deposit at a branch in a different region like Bicol, you’ll be charged a certain amount. This is one of the bank fees you should watch out for when choosing the best bank in the Philippines.
Other fees to consider include ATM balance inquiry and withdrawal fees and late payment penalties for loans and credit cards.
Information regarding bank fees can be found at the banks’ websites, though it’s better to personally ask the bank, as certain fees may not be posted online.
- ATM Service Fees Cardholders Need to Know
- Personal Loan Fees and Charges to Consider Before Borrowing Money
4. Accessibility of Branches and ATMs
For busy and on-the-go people who need to perform financial transactions often but barely have the time to do so, the best bank in the Philippines is the one with a branch nearest their home, office, or place they often visit or pass by. Having ATMs and branches in malls those that open on weekends also makes banking a lot convenient.
5. Bank Security
A critical factor in choosing the best bank in the Philippines has to do with safety. Does the bank have security features in place to ensure that its customers’ personal data is protected from hackers? Can you trust the bank to keep your money safe with them?
However, don’t expect to find a bank that’s totally hacker-proof. No matter how advanced a bank’s security technologies are, the risk is always there. Everyone is at risk of identity theft, and in some cases, carelessness or lack of awareness on the part of customers increases that risk.
What matters more are the pre-emptive actions the bank takes to keep your account secured, as well as what it does when your account is compromised. Does it notify customers right away when there’s any suspicious activity on their accounts? Does it promptly investigate any fraudulent transaction and provide updates?
It’s also important to ensure that you’re signing up only with a bank that’s a member of the Philippine Deposit Insurance Corporation (PDIC). This way, you’re entitled to a maximum of PHP 500,000 deposit insurance coverage should the bank close down. Check the list of PDIC-member banks here.
6. Customer Service
Customer service spells the difference between an excellent and horrible banking experience. Bad customer service manifests in different ways, from unresponsive hotlines to tellers who lack empathy and professionalism. Avoid starting a banking relationship with a company that treats its customers poorly.
Ask family and friends for feedback on a certain branch where you’re planning to open an account. Look for online reviews, too. Better yet, visit the nearest branch of the bank and observe how the staff interacts with customers. Usually, smaller banks that deal with fewer customers tend to provide better customer service than larger banks that serve so many clients.
To find out the best bank in the Philippines for your needs, trim down your list by checking bank websites, contacting their hotlines, and getting information about the bank and the products it offers. Once you’ve selected a bank, choose the right bank account type to go with it.
Venus is the Head of Content at Moneymax, with over 15 years of combined experience in digital marketing, corporate communications, PR, and journalism. She invests in stocks, mutual funds, VUL, and Pag-IBIG MP2. Outside of work, she’s crazy about cats and Korean dramas. Follow Venus on LinkedIn.