The Ultimate Checking Account Guide for Filipinos

by Venus Zoleta, on category "Personal Finance"

November 28, 2019


Checking Account Guide for Filipinos | Moneymax

Even though banking has gone digital these days, traditional financial products like checking accounts are still common in the Philippines. Some businesses and lending institutions even prefer payments in checks that serve as tangible proof of transaction.

For regular folks, the need for a checking account may not be as urgent as that of a savings account, except for borrowers who are required by lenders to issue post-dated checks.

Need to open a checking account? Here’s everything you need to know about checking accounts in the Philippines.

What is a Checking Account?

A checking account, also called current account, is a type of bank account that enables the holder to make over-the-counter deposits and withdraw funds through writing checks and/or using a card.

Aside from a checkbook, many checking accounts nowadays come with an ATM or debit card for withdrawals, point-of-sale (POS) transactions, and online payments. Some even include a passbook for transaction monitoring.

How Does a Checking Account Work?

Checking Account in the Philippines - How it Works

Photo by David Goehring via Flickr, Creative Commons

What is a Checking Account Used For?

The ability to write checks is what defines a current account. But since account holders can also use a debit card, a checking account can be used for a wide range of financial transactions, including the following:

  • Monthly payments for a personal loan, car loan, housing loan, or life insurance premium by issuing post-dated checks (1)
  • Payment for credit card bill
  • Car insurance premium payment
  • Utility bills payment
  • Payment for rental fee, tuition, and large-amount transactions
  • Payment for various business expenses
  • Monitoring business transactions through a monthly statement of account and online banking facility with images of issued checks
  • Making in-store and online purchases using the ATM/debit card

Read more:

How to Access Funds in a Checking Account

Checking accounts are highly liquid, meaning holders can easily access funds in their accounts.

Here are the various ways to access money in a current account:

  • Writing a check
  • ATM withdrawals and POS transactions using a debit card
  • Over-the-counter withdrawals
  • Online funds transfer

Benefits of Having a Checking Account

Why is it important to have a checking account?

Besides being a requirement for loan amortization and insurance premium payments, checks are also a safer and more convenient way to pay with a large sum of money. You’d feel more secure bringing a check than cash when paying a six-digit amount, right?

A current account also lets you keep a record of your transactions, which you can easily track via the monthly statements mailed to you or using the online banking channel of the bank.

Checking Account vs Savings Account: What’s the Difference?

Checking accounts share some similarities with savings accounts, like the ability to deposit and withdraw funds. Deposits in both types of bank accounts are insured up to PHP 500,000 by the Philippine Deposit Insurance Corporation (PDIC).

On the other hand, checking accounts and savings accounts are different in many ways. The most obvious difference is that you can issue checks using a current account. Checking account opening is also more expensive, with their higher initial deposit and maintaining balance requirements than savings accounts.

Although both deposit accounts can earn interest, savings accounts typically have higher rates than current accounts. This is why the former is ideal for saving money, while the latter is better for making financial transactions.

Read more: Savings Account vs. Current Account: What are the Pros and Cons?

5 Types of Checking Accounts in the Philippines

Checking Account in the Philippines - Types of Checking Accounts

Before you start looking for options, it’s important to know first the different types of checking accounts and which one fits your needs best.

Current accounts in the Philippines can be classified into five categories based on their features and purpose.

1. Entry-Level Checking Accounts

Entry-level current accounts are ideal for first-time depositors because of their low initial deposit and maintaining balance requirements of PHP 5,000 or less. These accounts don’t earn interest and don’t have a debit card (those some offer an optional card).

2. Personal/Individual Checking Accounts

This type of checking account is for the personal use of individuals who need to issue checks for different payment purposes.

3. Business/Corporate Checking Accounts

These commercial checking accounts suit the needs of small and medium enterprises, as well as corporations. Business checking accounts generally have higher minimum maintaining balances than personal checking accounts.

4. All-in-One Checking Accounts

These bank accounts combine the features of a savings account and a checking account. All-in-one checking accounts come with a checkbook, ATM/debit card, and passbook. Typically, these are interest-earning accounts with a high initial deposit and maintaining balance.

5. US Dollar Checking Accounts

All the checking account types above allow transactions in Philippine Peso. If you need to transact in USD, go for a US dollar checking account. Currently, only Citibank and PNB offer this type of current account in the Philippines.

3 Factors to Consider When Choosing a Checking Account

Checking Account in the Philippines - Factors to Consider When Opening a Checking Account

You’ll find plenty of options for checking accounts in the Philippines. Although they seem pretty much the same, there are not-so-apparent differences that make some better suited for you than the rest.

The key to knowing the best checking account for you is to read the fine print and pay close attention to these crucial features:

1. Checking Account Initial Deposit and Maintaining Balance Requirements

Consider only checking accounts that you can afford to open and maintain. Otherwise, you might end up always falling below the required minimum balance and pay the corresponding penalty fee, which can deplete the funds in your checking account.

To give you a head-start, here are the minimum initial deposit and maintaining balance requirements of checking accounts in the Philippines.

Checking Account

Type

Initial Deposit and Maintaining Balance

RCBC Payroll CheckingEntry-levelPHP 1,000
UCPB CheckStarterEntry-levelPHP 1,000
China Bank Savings Easi-Checking BasicEntry-levelPHP 3,000
Bank of Commerce CheckingPersonalPHP 5,000
BDO Peso CheckingPersonalPHP 5,000
China Bank Savings CheckMateAll-in-onePHP 5,000
China Bank Savings Easi-CheckingPersonalPHP 5,000
Citystate Regular CheckingPersonalPHP 5,000
DBP CurrentPersonalPHP 5,000
EastWest Regular CheckingPersonalPHP 5,000
LandBank Regular CurrentPersonalPHP 5,000
PNB Budget CheckingPersonalPHP 5,000
PSBank Regular CheckingPersonalPHP 5,000
Security Bank All Access CheckingAll-in-one
  • Initial deposit: PHP 5,000
  • Maintaining balance: PHP 25,000
UCPB Regular CheckingPersonalPHP 5,000
Bank of Commerce CheckingBusinessPHP 10,000
BPI Regular CheckingPersonalPHP 10,000
BPI BizLink CheckingBusinessPHP 10,000
BPI Business CheckingBusinessPHP 10,000
DBP CurrentBusinessPHP 10,000
LandBank Peso EASY CheckPersonalPHP 10,000
LandBank Peso EASY Check with ATM AccessAll-in-onePHP 10,000
LandBank Regular CurrentBusinessPHP 10,000
Maybank Classic CheckingPersonalPHP 10,000
Metrobank Regular CheckingPersonalPHP 10,000
Metrobank Commercial CheckingBusinessPHP 10,000
PNB Regular CheckingPersonalPHP 10,000
PSBank Regular CheckingBusinessPHP 10,000
RCBC Regular CheckingPersonalPHP 10,000
BDO Smart CheckingAll-in-onePHP 15,000 (personal) / PHP 25,000 (business)
Citystate Regular CheckingBusinessPHP 20,000
EastWest ChequeMaxPersonalPHP 20,000
EastWest Regular CheckingBusinessPHP 20,000
LandBank Peso EASY CheckBusinessPHP 20,000
Bank of Commerce Complete CheckingAll-in-onePHP 25,000 (personal) / PHP 50,000 (business)
BPI Maxi OneAll-in-onePHP 25,000
Metrobank Account OneAll-in-onePHP 25,000 (personal) / PHP 50,000 (business)
PNB Priority CheckingAll-in-onePHP 25,000
PSBank Premium CheckingAll-in-onePHP 25,000
RCBC Dragon Peso CheckingAll-in-onePHP 25,000
RCBC Super Value CheckingAll-in-onePHP 25,000
UCPB Multi-OneAll-in-onePHP 25,000
EastWest ChequeMaxBusinessPHP 50,000
EastWest ChequeMax RewardsPersonal/BusinessPHP 100,000
PNB GreencheckUS dollarUSD 2,000

2. Checking Account Fees and Charges

The bank may charge you several account maintenance and transaction fees that are deducted from your checking account balance. Find out and compare the following fees and charges when choosing a current account:

  • Checkbook re-order cost – The first pad of checks is usually provided for free. But when you’ve used it up and need to get a new checkbook, you’ll have to buy one for PHP 175 to PHP 300 per booklet. Checkbooks for commercial use are more expensive at PHP 350 to PHP 600 each.
  • Service fee for falling below the maintaining balance – If your checking account goes below the required maintaining balance for at least two months, you’ll be charged a fee of PHP 200 to PHP 500, depending on the bank.
  • Returned check charge – This is the fee charged per bounced check or returned check due to insufficient balance, stop payment order, or closed account. It ranges from PHP 1,000 to PHP 2,500 per bounced check.
  • Stop payment order (SPO) fee – When you request a stop payment (2), you’ll be charged PHP 100 to PHP 200 per application and cancellation of a check. The SPO fee can go as high as PHP 2,000.
  • Overdraft charge – An overdraft occurs when you issue a check or withdraw money for an amount that’s higher than the available balance in your checking account. The bank may charge a fee in that case.

3. Checking Account Interest Rates

Most current accounts in the Philippines are used for transactional purposes only and thus don’t earn any interest. However, a few ones are interest-bearing accounts. These checking accounts have fixed interest rates ranging from 0.25% to 1.25% per annum for a minimum balance of PHP 10,000 to PHP 100,000.

Interest-Earning Checking Accounts in the Philippines

Checking Account

Interest Rate

Minimum Balance to Earn Interest

PSBank Premium Checking0.50% to 1.25%PHP 25,000
BPI Maxi One0.25% / 0.35%PHP 25,000
BDO Smart Checking0.25%PHP 15,000 (personal) / PHP 25,000 (business)
China Bank Savings Easi-Checking0.25%PHP 10,000
China Bank Savings CheckMate0.25%PHP 20,000
Metrobank Account One0.25%PHP 50,000
RCBC Dragon Peso Checking0.15% to 0.50%PHP 25,000
RCBC Super Value Checking0.15% to 0.224%PHP 100,000
RCBC Regular (interest-bearing)0.15%PHP 25,000
EastWest ChequeMax0.125%PHP 20,000 (individual) / PHP 50,000 (corporate)
LandBank Peso EASY Check0.10%PHP 10,000 (individual) / PHP 20,000 (corporate)
LandBank Peso EASY Check with ATM Access0.10%PHP 10,000
PNB Priority Checking0.10%PHP 25,000
Security Bank All Access Checking0.10%PHP 100,000
Bank of Commerce Complete CheckingVariesPHP 50,000

How to Open a Checking Account in the Philippines

Checking Account in the Philippines - How to Open a Checking Account

Checking account opening is almost similar to opening a savings account in terms of requirements and procedures.

Here’s the key information you need to remember before you open a checking account.

Checking Account Opening Requirements

Most banks require the following documents for opening a checking account:

  • At least two valid IDs
  • Filled-out customer information sheet (available at the bank branch)
  • Latest 1 x 1 photos
  • Tax identification number (TIN)

Depending on the bank and the applicant, additional documents might be required, including the following:

  • Proof of latest billing (utility bill, credit card bill, statement of account, etc.)
  • Existing savings account with the bank for at least six months
  • Endorsement letter from a lending company, promissory note for an approved loan, or any document proving the need for a checking account
  • Alien Certificate of Registration (ACR) for foreign workers and residents in the Philippines

Steps to Opening a Checking Account

  1. Visit the nearest branch of your preferred bank (ideally one where you have an existing bank account).
  2. Present the checking account requirements to the bank staff.
  3. Fill out the checking account opening forms.
  4. Pay the initial deposit.
  5. Wait for your checkbook (and debit card plus passbook, if applicable), which will be issued instantly during your visit to the bank.

Tips for Managing Your Checking Account

Checking Account in the Philippines - How to Manage a Checking Account

Photo by Ken Teegardin via Flickr, Creative Commons

A huge responsibility comes along with having a checking account. The last thing you’d want to happen is to discover you’ve issued a bounced check, and the receiving party is suing you for it. Or your check falls into the wrong hands, causing you to lose money in your checking account.

Remember these quick tips to maintain your checking account properly and avoid any financial disaster:

  • Maintain just one checking account to monitor your finances more easily and to avoid potential fees.
  • Enroll in your bank’s online banking facility, so you can conveniently keep track of your balance and transactions.
  • Use your checking account to keep only the money you need for payments and other transactions. Put the rest in other instruments that can grow your money, such as savings accounts, time deposits, and investment vehicles like mutual funds and bonds.
  • Balance your checkbook regularly (3). Record all your deposits, issued checks, and debit card transactions in your check transaction register, and then compare your records with your statement of account or online banking account.
  • Keep your checkbook in a safe place.
  • Avoid fees by keeping your checking account sufficiently funded at all times. Also, make sure your transactions don’t bring your balance to zero.
  • Write your checks legibly and carefully. Double-check the date, amount, and other information on the check before signing it.
  • Never issue a check with erasure, alteration, and/or incomplete information.
  • Avoid issuing a check payable to cash as much as possible.

Final Thoughts

Even if you don’t need a checking account right now, it helps to know how it can help you meet your midterm to long-term financial goals. If you’re beginning to put your finances in order, having a checking account is a good step in the right direction.

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