Many people don’t know the common basic terms used in savings account. It is the reason why I made an article about it. However, if you are a banker or your job is related to finance, I think you already know this whole article is all about.
Savings account is a typical bank product that allows customers to deposit their money on their account so it will earn a certain interest calculated per year. Opening a savings account in the Philippines is not difficult if you are in the country. However, if you’re abroad, it is somewhat hard to apply because most of the banks don’t have an online application for savings account.
Nevertheless, if you are considering to open a savings account in a Philippine bank, you will need to learn some of the common terms used in banking particularly savings account.
Most Common Terms of Savings Account
Interest Rate or Annual Percentage Yield (APY)
I believe this is the most important thing you should learn when picking a savings account. Interest rate is the rate of how much money you will earn from the money you deposited. Currently, the typical interest rate or APY of most savings account in the Philippines is around 0.25-0.5%.
When you apply for a savings account, you will be required to make a first deposit so that your account would have an initial balance of money. That money you deposited is what we called initial deposit.
The money you must maintain in your savings account so that bank will not charge a penalty in your account is called the maintaining balance. Like initial deposit, every banks has its own requirements for maintaining balance.
Automated Teller Machine is the 24-hour teller machine that you can use to withdraw or deposit money provided you have an ATM card that is linked to your savings account. It is usually located outside of the bank or inside area of establishments like malls or department stores.
This is a piece of paper you need when you want to deposit money through tellers inside the bank. You will be required to furnish your account name, number and the amount of money you want to deposit.
Similar to deposit slip but this one is used to withdraw money. This is used when you have no ATM card.
This is the fee charged by the bank for financial inactivity of your savings account which is normally around P200. Some banks charge dormancy fee if you have no activity for one year, meaning you didn’t make any deposits or withdrawals on your savings account.
In general, savings account terms are not complicated and can be understood by common people. It is better to learn these common terms so you can have an idea how savings account works.