It's High Time to Open Another Bank Account, Here's Why

(SPOT.ph) Fresh graduate Kaye, not her real name, has had one bank account her entire life. When a technical error hit her account in early 2023, she realized she needed to open another one as soon as possible. "Natakot ako, what if I can’t withdraw and I need money?" she told SPOT.ph. Worse, she thought, "What if I lose access to my account or accidentally spend all of it?"

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Money matters are a touchy topic for Filipinos. Plus, opening bank accounts prior to the pandemic warranted a full day and several ID cards, making bank accounts a no-no for many.

“One of the main reasons that prevent Filipinos from opening several accounts would be lack of information and awareness. We do not even discuss it in schools. It is something that we usually figure out on our own by asking questions probably from our family or friends, or online via Google or different social media platforms,” said Aivan Parducho, a financial consultant at PRU Life UK.

With the recent BPI issue, you might be thinking of opening an account or assessing how you manage your money. If you don't know where to start, we got you covered.

Planning to maintain multiple bank accounts? Keep these in mind:

Think of your different needs

Different accounts will enable you to manage your finances better. Filipinos are advised to have at least three accounts for different purposes, Parducho said.

The first should be for your emergency fund. "The amount should be enough to cover from three to six months of monthly expenses," he said.

You should have "another one for your savings, and the last one for your monthly expenses. Sa ganitong paraan maiiwasan na unconsciously magastos mo ‘yung pera na nakalaan para sa emergency fund and savings mo," he added.

“Mas madali mo din malalaman if you will be exceeding your budget for the month since nakahiwalay ang account for monthly expenses sa savings mo, thus making you more conscious of the things that you spend your money on,” he added.

Another reality to consider is how much of your money is insured under the law. Bank deposit accounts are insured up to only P500,000 by the Philippine Deposit Insurance Corporation should your bank ever close due to bankruptcy.

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More specific goals

"Some people have a separate account for saving up for a specific thing like a car, a house, retirement, emergencies," Parducho said. Married couples also opt for a joint account and a separate individual account for family needs and personal spending respectively.

People have also opened up accounts specifically for travel budgets and concert funds as borders reopen and artists resume tours.

“If may gusto silang bilhin na something personal like a bag for the wife and a car or motorcycle for the husband, pwede nila gamitin ‘yung pera sa individual account nila, that way, maiiwasan din ang away ng mag-asawa since pera galing sa personal savings nila ang ginamit at hindi ‘yung pera meant para sa expenses ng pamilya,” he said.

Entrepreneurs and those managing businesses are known for keeping separate accounts for the business and their own personal spending.

Consider the bank’s services

Everybody’s got their preferred bank, be it the product of family referral or ease of access to your house, but it’s just as important to look at the services offered.

"Choose a bank that gives the best offer on the type of account that you want to open. Let’s say for example if it’s for your emergency fund then choose one that offers the best interest rate per annum," Parducho said.

Pandemic restrictions pushed most banks to go online, enabling Filipinos to skip long lines and transact from wherever. Still, it doesn’t fully eliminate the possibility of in-person transactions so it’s best to go for a nearby bank.

"Check how long the bank has been operating in the country, how [they are] in terms of protecting their client’s accounts, especially from hackers. Do they have accessible ATM machines around areas where you usually go to? Do they provide good customer service, and what are the bank fees that they charge for different transactions?” Parducho said.

Though BPI was the latest bank to suffer from maintenance issues, that’s not to say other banks are spared from lag times, potential hacks, and security concerns. Best to do your research before opening an account.

“It is also advisable to have an account at a different bank, either traditional or digital, so that if ever one bank encounters a problem like a technical issue, you can still withdraw money from the other bank when you need it,” he said.

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What about digital banks?

Online or digital banks offer high-interest savings accounts compared to traditional banks, thus buying your money a chance to grow more. When it comes to ease of opening and maintaining accounts, digital banks have the advantage.

"They have also made digital transactions or payments easier for more people, plus they do not require any maintaining balance which makes them more accessible for everyone. However, they have limited services compared to traditional banks," Parducho said.

"These digital banks [such as Maya, Tonik, GCash] like traditional banks, are also regulated by the Bangko Sentral ng Pilipinas and are covered by the [Philippine Deposit Insurance Corporation] for up to P500,000 per depositor. So should these banks go into bankruptcy, our money is insured but only up to P500,000," he added.

Traditional banks recently adjusted their know-your-client process to allow Filipinos to open accounts from their own homes and transact online. Though convenient, digital bank services are limited, and accounts for dollar savings and long-term time deposits must be made at traditional banks.

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So should you go for it?

Owning more than one account means allocating more time and effort to maintain and monitor the accounts. More accounts also mean having more money to spread around, which not everyone may have. Though recommended, there are certain factors that may limit someone from maintaining more than one account.

“The simplest and most practical reason to having several savings accounts is to be able to withdraw money whenever you need it without having to worry if a certain bank’s ATM machine is offline or if one bank encounters a technical issue, the other portion of your money that you keep in another bank would be unaffected,” Parducho said.

“Having several savings accounts also helps us manage our finances better since you will be able to monitor how much money you have already saved and how much money you have left to spend for the month. The more we monitor our expenses, the more we will be able to manage and control our spending,” he said.