Is the bank safe and sound?Know about the bank’s financial condition. Published Audited Financial Statement is posted at their website and branches. Refer to the Capital Adequacy Ratio (CAR) at the Other Information portion. A CAR of 10% and above means that the bank has enough cushions to handle potential financial losses and can likewise protect its depositors. Is the bank aggressively marketing its deposit products with exorbitant returns such as double-your-money schemes? Check the bank’s size and classification. Their capital may not be commensurate to the promises they make.

Go to your chosen or preferred bank or bank branch.

Present an acceptable valid identification card (ID). The following valid identification cards are acceptable to banks: Government-issued IDs and Student’s ID.

Obtain from an authorized bank employee the required forms (e.g., client information form, signature cards, deposit slip), including the terms and conditions of the deposit account.

If the terms and conditions are acceptable, fill out, sign and submit the forms and deposit the required initial amount of deposit. If there are terms and conditions that are not clear, request that these be explained.

Remember to sign all or otherwise cancel out unsigned spaces allotted for authorized signatories of the deposit account.

Obtain the proof of deposit/ownership of deposit.

3.

4.

5.

6.

1.

2.

How much is the required minimum average daily balance? Assess whether you have enough money to keep this amount in your account to avoid charges for falling below the minimum balance.

Financial Education: Building Block for a Stronger Economy

Developed by the Financial Literacy and Advocacy DivisionFinancial Consumer Protection Department

Financial Consumer Protection DepartmentSupervision and Examination SectorBangko Sentral ng Pilipinas5th Floor Multi-storey BuildingBSP Complex, A. Mabini Street, Malate1004 Manila

Telephone Number:(02) 708-7087

Email Address:consumeraffairs@bsp.gov.ph

What are the terms and conditions of the deposit?Be fully aware of the terms and conditions that govern the deposit account. Request the bank personnel to explain unclear provisions of the deposit agreement. Never sign a document that you do not understand and agree to.

When am I charged service fees/charges and how much?The amount, condition and frequency on the imposition of fees and charges on deposit products differ from bank to bank. To know how to avoid fees and charges, you may refer to our primer on ‘How to save on bank fees and charges’ to understand the instances when these are imposed. Clarify with the bank representative all vague information on transactions subject to fees and charges.

What other factors should I consider? Do a background check on the bank. Ask who are managing it. Who are its major clients? How long has it been in the business? Is it known for good customer service?

A deposit account that earns modest interest rates

May be withdrawn anytime

Maintained for liquidity purposes

Depending on the product offered by the bank

Zero[3] to ₧10,000.00 or higher[4]

Zero[3] to ₧10,000.00 or higher[4]

Depositors, however, must maintain the required minimum Average

Daily Balance (ADB), as applicable. Otherwise, they may be subjected to

charges/fees, as applicable.

Anytime

On demand or anytime bank is open or ATMs are on-line

YES, but generally low

Deposit balance falls below minimum average daily

balance

ATM service fee for withdrawals or balance inquiry in other bank’s

network

Dormancy fee (no deposits or withdrawals within 24

months)

Inter-branch fees for deposits and withdrawals in

other branches

Such other fees/charges indicated in the terms and conditions of the deposit

account

Up to the balance available on your account

YES, subject to 20% final withholding tax

Insured by the PDIC for up to ₧500,000.00

A deposit account that is withdrawn through the

issuance of checks

Normally used to settle payments/ obligations

May or may not earn interest

₧5,000.00 to ₧50,000.00or higher[4]

₧5,000.00 to ₧50,000.00 or higher[4]

Anytime

Withdrawal is via check issuance; encashment of checks may be made only

during banking hours

Generally NO, except for some checking account products with special

features such as combination of savings account and

checking account

Deposit balance falls below minimum monthly average

daily balance

ATM service fee for withdrawals or balance inquiry in other bank’s

network

Dormancy fee (no deposits or withdrawals

within 12 months)

Cost of Checkbook (inclusive of Documentary Stamp Tax)

Check drawn against insufficient funds (DAIF) or

drawn against an uncleared deposit (DAUD)

Such other fees/charges indicated in the terms and conditions of the deposit

account

Savings account designed to cater the needs of low

income sectors, including microfinance clients

Only for individual microfinance clients whose

average daily savings account balance does not

exceed Forty Thousand Pesos (₧40,000.00)

Not subject to dormancy charges

Minimum maintaining balance not exceeding One Hundred Pesos (₧100.00)

Passbook

Zero to ₧100.00

Opening Balance for Microdeposits linked to

micro-loans are sometimes dependent on loan amount

Zero to ₧40,000.00

ADB for Microdeposits linked to microloans are sometimes dependent on loan amount.

Anytime

Borrowers required to have a microdeposit account are compulsary to make fixed small deposits, normally

done on a weekly basis [7]

On demand or anytime bank is open or ATMs are on-line

Microdeposit linked to Microloans has a non-

withdrawable feature until loan is outstanding [7]

YES, but generally low

Deposit and withdrawal fees

ATM withdrawal fee

Closing fee

Up to the balance available on your account

Microdeposit linked to Microloans has a non-

withdrawable feature until loan is outstanding [7]

What is it?

What is the physical evidence of the bank account?

What is the required initial deposit?

What is the required Minimum Average Daily Balance (ADB)[5]?

When can I make additional deposits?

When can I withdraw?

Is the interest income subject to tax?

Does it earn interest?

What transactions are subject to fees/charges?

How much can I withdraw?

Insurance Coverage

A deposit account wherein money is left with the bank for a specific period of time (e.g., 30, 60, 90, 180, or 365 days) to earn fixed interest

Interest is normally higher than that paid to a savings

account

Automatic Renewal may apply only if previously arranged with the bank;

crediting to savings accounts at maturity is automatic

Certificate of Time Deposit

₧1,000.00 to ₧10,000.00

Not applicable

On maturity date

On maturity date

Withdrawal before maturity date may be allowed but

pre-termination fee may be charged and savings rate

may apply if pre-terminated

YES, subject to 20% final withholding tax

However, no tax shall be imposed on time deposit with

maturity of 5 years or more

Placement is subject to Documentary Stamp Tax (DST)

if pre-terminated

YES, normally higher than savings interest rate

Pre-termination fee

Below are some important notes you have to know on the following basic bank accounts[1]:

QUESTIONS SAVINGS TIME CURRENT/CHECKING MICRODEPOSIT

Features may vary per bankOnly regular or ordinary time deposits are discussed. Long Term Negotiable Certificates of Time Deposits are not covered by this primerFor OFWs, opening accounts without initial deposit as well as maintaining balance may be subject to respective policies of banksDepending on the type of deposit product of each bank or the depositor’s compensating business with the maintaining or depository bankAverage Daily Balance (ADB) - is defined as the sum of the daily end-of-day balances in the account for a month by the number of days in that month. The formula for computing ADB is as follows:

Minimum ADB to earn interest is sometimes different from Minimum ADBOnly banks with Microfinance Function can offer this productThis savings product works as a hold-out deposit on the loan. It can be a source of funds for the borrower to settle a due loan in case of default and usually cannot be accessed by the client except when the loan is fully paid

ADB = (Day 1 ending balance + Day 2 ending balance …+ Day 30/31 ending balance) Number of days in the month (i.e., 30/31 days)

[2] [6]

[1]

[2]

[3][4][5]

[6]

[8]

[7]

[8]

Up to the balance available on your account

Up to the balance available on your account

YES, subject to 20% final withholding tax

YES, subject to 20% final withholding tax

Depending on the product offered by the bank

[8]