Published: August 23, 2021 | Updated: September 2, 2021 | Posted by: Ricky Publico | Personal Finance
The cashless revolution in the Philippines is in full force with the recent arrival of Tonik Digital Bank, the country’s first digital-only bank. It is also our first introduction into the concept of neobanking, the supposed future of banking. The brazen newcomer promises better interest rates and an even easier application process compared to other digital banks in the Philippines.
But that begs the following questions: What is neobanking? How does it compare to digital banking? How good are the interest rates? And how exactly do I get my hands on Tonik? Luckily, there is enough space in this helpful guide to answer all those burning questions.
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Neobanking is the newest way to go about your banking needs in the digital age. For starters, a neobank is a digital-only virtual bank that offers financial products and service 100% online with no physical branches. From opening an account down to applying for a loan, you do all your transactions with a neobank through your smartphone.
Note that neobanks aren’t viewed as traditional banks. Instead, they are considered financial technology firms that partner with financial institutions to provide a more accessible approach to banking. Because they don’t operate as banks, they can focus more on improving the overall experience like cutting down fees and offering higher interest rates.
But since they’re not considered traditional banks, neobanks offer a limited number of financial products compared to traditional banks. They usually offer savings and checking accounts, money transfer and payment services, and financial education tools, among others.
You could say that neobanking is the natural evolution of digital banking since their difference is only minimal. For starters, neobanks have no physical branches while digital banks are technically considered traditional banks with a few branches to maintain. This allows neobanks to save costs, which means better rates and lower fees to their customers.
Neobanks also provide a better option for unbanked individuals who want to skip the hassle of traditional banking and undeserved clients who have little to no credit score to speak of. Compared to digital banks, they require less requirements and make faster approvals. In a way, we can consider them a more convenient way to experience digital banking.
Tonik Digital Bank turned heads after launching on March 18, 2021 with an annual interest rate of up to 6% for time deposits. Dubbed as the first digital-only bank in the Philippines, Tonik wants to focus on “the unbanked and underserved, as well as the emerging affluent millennials in offering services and products through digital technology.”
And to cover their bases, Tonik has been granted a full rural bank license issued by the Central Bank of the Philippines. They are also regulated by the Bangko Sentral ng Pilipinas and their deposits are insured by the Philippine Deposit Insurance Commission. Needless to say, Tonik is a legit digital bank that you should give a try as soon as possible
As the newest digital bank on the block, Tonik Digital Bank is already offering a range of banking services that will definitely pique your interest. According to Tonik, they are looking to add more products like personal loans in the near future.
After you open a Tonik account, you instantly get the default savings account with an annual interest rate of 1%. From here, you can cash in through bank transfer, online banking, and over-the-counter payments. You can also send and receive money from Tonik users and other banks.
If you want your savings to grow bigger, you can make a Solo Stash with an interest rate of 4%. You can choose a pre-set goal from the app or make your own and grow your money from there. You can even make up to five Stashes so you can earn for multiple goals at any given time.
If you want to involve your friends in your money saving goals, you can also create a Group Stash with an annual interest rate of 4.5%. Invite more family and friends in your Group Stash so you can earn more and quicker. You can make up to five Group Stashes (combined with Solo Stashes).
And if you really want to grow your savings using only your smartphone, you can keep it in Tonik’s time deposit account with an annual interest rate of up to 6%, one of the highest in the market today.
Great news! You can now get your Tonik physical debit card that can be used at any ATM or establishment that accepts Mastercard. With this, you can now maximize your access to your funds while keeping your money secure.
You can order your Tonik debit card through the app. You’ll also need to provide a valid ID and pay PHP 300 for it (PHP 200 for the card and PHP 100 for delivery). The amount will be deducted from your Tonik account.
Covered delivery areas are still quite limited. But if your area is within the covered delivery areas, expect to receive your card within 7 to 10 days.
When you receive your physical debit card, activate and set a six-digit ATM PIN in your Tonik app. Just go to the main dashboard, click on “Activate,” and follow the instructions. Key in your card details for verification before you set and confirm your ATM PIN.
Note: To be on the safe side, try to keep the fund limit on your physical debit card low. Moreover, keep using your virtual card for online transactions.
Back to the main article: Digital Banking in the Philippines: Everything You Need to Know
Now we’ve come to the fun part. Opening a Tonik Account take you less than 10 minutes. All you have to do is download the Tonik app and follow these instructions.
Verifying your Tonik Digital Bank account is incredibly easy. From the Tonik dashboard, just click Verify Your Email and enter the One-Time Password sent to your registered email. And that’s it, your account is now verified!
Now that your Tonik Digital Bank account is up and running, it’s time to cash in and start saving up for your financial goals. There are three ways to cash in using the Tonik App. Local bank transfer will be offered soon.
Sending money using your Tonik Digital Bank account is also easy. Note that compared to other full-fledged digital banks, your transfer channels are a bit limited for now.
Technology will never cease to amaze all of us, especially it its meant to improve an aspect of our daily lives. Neobanks like Tonik Digital Bank are a proof of this as they once again made digital banking even more possible in the Philippines. Don’t miss out your chance to try out new tech and grow your savings at the same time.
Ricky is the zaniest Senior Content Writer at Moneymax, with over five years of writing experience in the digital marketing industry. He is a huge fan of pro wrestling, smartphones, and binge-watching. Follow Ricky on LinkedIn.