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 in the Philippines may not be as urgent as that of a savings account, except for borrowers who are required by lenders to issue post-dated checks.[1]
Want to know what are the requirements and how 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?
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 in the Philippines 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
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
Read more: 25 Top Commercial Banks in the Philippines
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
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.
A checking account in the Philippines can be classified into five categories based on their features and purpose.
1. Entry-Level Checking Accounts
An entry-level current account, sometimes called a starter checking account, is ideal for first-time depositors because of its 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 types of checking account in the Philippines mentioned 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
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.
UCPB CheckStarter offers the lowest initial deposit for a checking account at just PHP 1,000. Find out the minimum initial deposit and maintaining balance requirements of different checking accounts in the Philippines.
See what these checking accounts from Metrobank, Chinabank, Landbank, PNB, PSBank, and RCBC have to offer.
|
Checking Account
|
Type
|
Initial Deposit and Maintaining Balance
|
|---|---|---|
| UCPB CheckStarter | Entry-level | PHP 1,000 |
| China Bank Savings Easi-Checking Basic | Entry-level | PHP 3,00 |
| Bank of Commerce Checking | Personal | PHP 5,000 |
| BDO Peso Checking | Personal | PHP 5,000 |
| China Bank Savings CheckMate | All-in-one | PHP 5,000 |
| China Bank Savings Easi-Checking | Personal | PHP 5,000 |
| Citystate Regular Checking | Personal | PHP 5,000 |
| DBP Current | Personal | PHP 5,000 |
| EastWest Regular Checking | Personal | PHP 5,000 |
| LandBank Regular Current | Personal | PHP 5,000 |
| PNB Budget Checking | Personal | PHP 5,000 |
| PSBank Regular Checking | Personal | PHP 5,000 |
| Security Bank All Access Checking | All-in-one |
|
| UCPB Regular Checking | Personal | PHP 5,000 |
| Bank of Commerce Checking | Business | PHP 10,000 |
| BPI Regular Checking | Personal | PHP 10,000 |
| BPI BizLink Checking | Business | PHP 10,000 |
| BPI Business Checking | Business | PHP 10,000 |
| DBP Current | Business | PHP 10,000 |
| LandBank Peso EASY Check | Personal | PHP 10,000 |
| LandBank Peso EASY Check with ATM Access | All-in-one | PHP 10,000 |
| LandBank Regular Current | Business | PHP 10,000 |
| Maybank Classic Checking | Personal | PHP 10,000 |
| Metrobank Regular Checking | Personal | PHP 10,000 |
| Metrobank Commercial Checking | Business | PHP 10,000 |
| PNB Regular Checking | Personal | PHP 10,000 |
| PSBank Regular Checking | Business | PHP 10,000 |
| RCBC Regular Checking | Personal | PHP 10,000 |
| BDO Smart Checking | All-in-one | PHP 15,000 (personal) / PHP 25,000 (business) |
| Citystate Regular Checking | Business | PHP 20,000 |
| EastWest ChequeMax | Personal | PHP 20,000 |
| EastWest Regular Checking | Business | PHP 20,000 |
| LandBank Peso EASY Check | Business | PHP 20,000 |
| Bank of Commerce Complete Checking | All-in-one | PHP 25,000 (personal) / PHP 50,000 (business) |
| BPI Maxi One | All-in-one | PHP 25,000 |
| Metrobank Account One | All-in-one | PHP 25,000 (personal) / PHP 50,000 (business) |
| PNB Priority Checking | All-in-one | PHP 25,000 |
| PSBank Premium Checking | All-in-one | PHP 25,000 |
| RCBC Dragon Peso Checking | All-in-one | PHP 25,000 |
| UCPB Multi-One | All-in-one | PHP 25,000 |
| EastWest ChequeMax | Business | PHP 50,000 |
| EastWest ChequeMax Rewards | Personal/Business | PHP 100,000 |
| PNB Greencheck | US dollar | USD 2,000 |
2. Checking Account Fees and Charges
The bank may charge you several account maintenance and transaction fees that are deducted from your current account balance. Find out and compare the following fees and charges when choosing a checking account in the Philippines:
- 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 in the Philippines 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.
Read more: 22 Savings Accounts in the Philippines with Low Maintaining Balance
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 Checking | 0.50% to 1.25% | PHP 25,000 |
| BPI Maxi One | 0.25% / 0.35% | PHP 25,000 |
| BDO Smart Checking | 0.25% | PHP 15,000 (personal) / PHP 25,000 (business) |
| China Bank Savings Easi-Checking | 0.25% | PHP 10,000 |
| China Bank Savings CheckMate | 0.25% | PHP 20,000 |
| Metrobank Account One | 0.25% | PHP 50,000 |
| RCBC Dragon Peso Checking | 0.15% to 0.50% | PHP 25,000 |
| RCBC Regular (interest-bearing) | 0.15% | PHP 25,000 |
| EastWest ChequeMax | 0.125% | PHP 20,000 (individual) / PHP 50,000 (corporate) |
| LandBank Peso EASY Check | 0.10% | PHP 10,000 (individual) / PHP 20,000 (corporate) |
| LandBank Peso EASY Check with ATM Access | 0.10% | PHP 10,000 |
| PNB Priority Checking | 0.10% | PHP 25,000 |
| Security Bank All Access Checking | 0.10% | PHP 100,000 |
| Bank of Commerce Complete Checking | Varies | PHP 50,000 |
So if you're shopping for the best bank for a checking account in the Philippines, remember that it should not only offer convenience and security but also competitive rates.
How to Open a Checking Account in the Philippines
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 Requirements
Most banks require the following documents for opening a checking account in the Philippines:
- 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 requirements 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
Read more: Dealing with the Unexpected: What Happens to Your Money When a Bank Closes
Steps to Opening a Checking Account
- Visit the nearest branch of your preferred bank (ideally one where you have an existing bank account). It's the easiest bank to open a checking account since you're already an existing client.
- Present the checking account requirements to the bank staff.
- Fill out the checking account opening forms.
- Pay the initial deposit.
- Wait for your checkbook (and debit card plus passbook, if applicable), which will be issued instantly during your visit to the bank.
Read more: ATM Service Fees Cardholders Need to Know
Tips for Managing Your Checking Account
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 in the Philippines properly and avoid any financial disaster
- Maintain just one personal 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.
Read more: 6 Things to Consider When Choosing the Right Bank for You
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.
Sources:
- [1] Post-dated check (AccountingTools)
- [2] Stop Payment Definition (Julia Kagan, Investopedia, 2020)
- [3] How to Balance Your Checkbook (Fowles, The Balance, 2020)
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