What You Need To Know Before You Open A Checking Account
A checking account has most of the features offered by a savings account, and it also allows checking facilities. Nowadays, checking accounts come with a debit card, for account holders to have more convenient access to their funds.
Compared to a regular savings account, checking accounts have lesser restrictions when it comes to monthly limits for withdrawal and spending. Here’s our guide to the things that you should prepare ahead before you can actually open a checking account.
Requirements for opening an account
- Valid ID with photo and signature.
- Initial Deposit (minimum ₱5,000 to ₱20,000)
- Utility Bill reflecting the address
Fees, charges and interest rates
| Interest rates | Fees | Minimum daily balance to earn interest |
|---|---|---|
| 0.125% to 0.50% per annum | Checkbook - ₱175 to ₱500 | ₱50,000 to ₱100,000 |
Why you might consider opening a checking account
Gone are the days when a checking account is only for the affluent. Nowadays, you can open one with only ₱10,000 initial deposit and many legal and banking transactions may require one.
While you can never go wrong with a savings account, a checking account will give you some liberties that other types of bank accounts couldn’t such as the following:
1. Issue bigger chunks of payment
Paying for big-ticket items like a downpayment for a car or a house, or even an entire amount for those two items is not possible by cash or even regular bank transfer. A cheque is easily the best way to pay for those types of purchases.
2. Secured payment
Carrying around cash isn’t ideal. If you want to make those large payments without the fear of getting all of your cash mugged, cheques are the way to go. Encashing cheques also have its SOP, thus even if someone stole your checkbook, they have no way to encash it without your authorization.
3. Convenience
The capability to make big payments with a checking account is a major convenience itself. It takes away the need to withdraw funds multiple times due to your daily withdrawal or transfer limit; You also save yourself a trip to the bank branch to process those types of money transfer or payments.
4. Traceable
A unique feature of checks is that it’s serialized. Checkbooks have pages, from the beginning all the way to the last piece. Issuing a check requires you to write down the details of who the funds will be released to. This makes it easier to track your money.
5. Pay recurring bills
Some loans or other installment purchases will require post-dated checks to secure your monthly payment. Post-dated checks not only secure your transaction, but it also provides the lender guaranteed form of payments.
How to open a checking account
Whichever bank you choose to open an account with, the process is most similar. The difference would boil down to the minimum deposit and some requirements specific to the individual banks.
To apply for one, the steps are usually as follows:
1.Gather all the documents needed
Typically, banks will only need 2 pcs. of 1×1 picture with a clear background, 1 billing statement showing your present address, photocopy of 2 valid IDs, and an initial deposit. These three are the main requirements and all the banks will ask for these. The initial deposit may vary from bank-to-bank and some of them may have additional requirements apart from these.
2. Submit your documents to the bank
You must submit all the hard copies of the documents to the bank branch. A short assessment will be done by your attending bank officer.
3. Assessment by the bank officer
A checking account isn’t granted to just anyone. When asked for the purpose of opening one, make sure you provide a clear-cut goal like opening a business, purchasing a condo, or investment. Bank officers won’t approve of you if you just tell them that you feel like opening one.
4. Fill-out application forms
Once you pass their brief interview/assessment, you will be tasked to fill out a form. Simply complete it with all the necessary information and submit it together with your documents once done.
You will also have to provide a minimum deposit and payment for the checkbook. The fees will vary per bank and that will be discussed below.
5. Wait for the release of your checkbook
Depending on your bank, your checkbook might be released on the same day or in another day. If you apply for a checking account in the main branch, the release can be on the same day. For branches that don’t have the facilities to create it, you may be asked to come back after a day or two. There are banks that also provides an ATM card together with the checkbook.
Which banks have a checking account?
Most banks offer checking accounts, but the most common and accessible ones are the following:
EastWest bank
One of the most affordable checking accounts you can obtain. It only requires a minimum deposit of ₱1,000. It also comes with a debit card on top of the checkbook.
| Minimum Initial Deposit | ₱1,000 |
| Maintaining Balance | ₱1,000 |
| Interest-Earning Balance | N/A |
| Interest Rate | 0% |
| PDIC Coverage | ₱500,000 |
| Fund Access | Philippine ATMs and Visa Plus ATMs worldwide EastWest Online Visa-accredited merchants worldwide Visa-accepting online merchants globally |
| Over-the-counter Transaction Fees (Withdrawal, Fund Transfer) | ₱100.00 |
| Dormancy Charge (Applied to dormant accounts 5 years and above AND balance falls below the minimum monthly ADB) | ₱30.00 per month |
BPI
BPI has various checking account products to choose from. Choose one which suits your purpose for opening one.
| Minimum Initial Deposit | ₱10,000 |
| Maintaining Balance | ₱10,000 |
| Interest-Earning Balance | N/A |
| Interest Rate | N/A |
| Minimum Initial Deposit | ₱25,000 |
| Maintaining Balance | ₱25,000 |
| Interest-Earning Balance | ₱25,000 |
| Interest Rate | 0.250% if daily balance is ₱25,000 - 999,999 (for debit card and statement) 0.350% if daily balance is ₱1,000,000 and above (statement or passbook only accounts) |
BDO
BDO’s checking account products focus on how their accounts can earn interest. Preferences aside, choose an account that offers the interest scheme you’re comfortable with. Their checking account also has a considerably lower minimum deposit requirement.
| Minimum Initial Deposit | ₱5,000 |
| Maintaining Balance | ₱5,000 |
| Interest-Earning Balance | ₱15,000 for personal ₱25,000 for business |
| Minimum Initial Deposit | ₱15,000 for personal ₱25,000 for business |
| Maintaining Balance | ₱15,000 for personal ₱25,000 for business |
| Interest-Earning Balance | ₱15,000 for personal ₱25,000 for business |
| Minimum Initial Deposit | ₱25,000 for personal ₱50,000 for business |
| Maintaining Balance | ₱25,000 for personal ₱50,000 for business |
| Interest-Earning Balance | ₱25,000 for personal ₱50,000 for business |
How to write a check
Signing a check is a no-brainer, but it isn’t for financial rookies either. In case you’re not yet familiar with particulars on what should go on that check, here’s a quick rundown on how to write a check!
1. Date – write down the complete date.
2. Pay to the order of – the name of the person or organization who the check will be encashed to. If it’s for an individual, it must state their complete name as shown in their valid ID. For organizations or establishments, it must indicate the official name of the company.
3. Peso amount in figures– state the amount you’ll pay, but in digits.
4. Peso amount in words – state the amount you’ll pay in words.
Writing the word “only” after the exact amount is spelled out is done to prevent unauthorized alteration of the intended amount originally stated in the check.
5. Signature line – this is the part where you sign the check. Make sure it matches your signature when you first opened the account.
A checking account is definitely not for individuals with a low financial profile. Opening one entails you to step up your financial game because from the get-go, getting approved to have one will require some compelling reason. It’s a step-up from the basic savings account, and while it may seem a bit daunting to open one, it’s actually less intimidating than you think.
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