What are the terms and conditions of the
deposit?
1. Go to your chosen or preferred bank or
bank branch.
2. Present an acceptable valid identification
card (ID). The following valid identification
cards are acceptable to banks: Governmentissued IDs and Student’s ID.
3. 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.
4. 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.
5. Remember to sign all or otherwise
cancel out unsigned spaces
allotted
for authorized signatories of the deposit
account.
6. Obtain the proof of deposit/ownership of
deposit.
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-yourmoney schemes? Check the bank’s size
and classification. Their capital may not be
commensurate to the promises they make.
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.
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.
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.
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?
Developed by the Financial Literacy and Advocacy Division
Financial Consumer Protection Department
Financial Consumer Protection Department
Supervision and Examination Sector
Bangko Sentral ng Pilipinas
5th Floor Multi-storey Building
BSP Complex, A. Mabini Street, Malate
1004 Manila
Telephone Number:
(02) 708-7087
Email Address:
[email protected]
Financial Education: Building Block for a Stronger Economy
Below are some important notes you have to know on the following basic bank accounts[1]:
QUESTIONS
SAVINGS
TIME [2]
CURRENT/
CHECKING
A deposit account that earns
modest interest rates
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
A deposit account that is
withdrawn through the
issuance of checks
May be withdrawn anytime
Maintained for liquidity
purposes
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]?
Interest is normally higher
than that paid to a savings
account
Normally used to settle
payments/ obligations
May or may not earn interest
Automatic Renewal may
apply only if previously
arranged with the bank;
crediting to savings accounts
at maturity is automatic
Not subject to dormancy
charges
Minimum maintaining
balance not exceeding One
Hundred Pesos (₧100.00)
Depending on the product
offered by the bank
Passbook
Zero[3] to ₧10,000.00 or
higher[4]
₧1,000.00 to ₧10,000.00
₧5,000.00 to ₧50,000.00
or higher[4]
Zero to ₧100.00
Zero[3] to ₧10,000.00 or
higher[4]
Not applicable
On maturity date
₧5,000.00 to ₧50,000.00 or
higher[4]
Anytime
When can I
make additional
deposits?
Up to the balance available
on your account
Insurance Coverage
[6]
[7]
[8]
Up to the balance available
on your account
Up to the balance available
on your account
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
Withdrawal is via check
issuance; encashment of
checks may be made only
during banking hours
On demand or anytime bank
is open or ATMs are on-line
Microdeposit linked to
Microloans has a nonwithdrawable feature until
loan is outstanding [7]
Generally NO, except for
some checking account
products with special
features such as combination
of savings account and
checking account
YES, but generally low
YES, subject to 20% final
withholding tax
YES, subject to 20% final
withholding tax
YES, subject to 20% final
withholding tax
YES, subject to 20% final
withholding tax
Deposit balance falls below
minimum monthly average
daily balance
Deposit and withdrawal fees
ATM service fee for
withdrawals or balance
inquiry in other bank’s
network
ATM service fee for
withdrawals or balance
inquiry in other bank’s
network
ATM withdrawal fee
Dormancy fee [8] (no deposits
or withdrawals within 24
months)
Dormancy fee [8] (no
deposits or withdrawals
within 12 months)
Closing fee
Inter-branch fees for
deposits and withdrawals in
other branches
Cost of Checkbook (inclusive
of Documentary Stamp 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
Such other fees/charges
indicated in the terms and
conditions of the deposit
account
[5]
Up to the balance available
on your account
YES, normally higher than
savings interest rate
Deposit balance falls below
minimum average daily
balance
[3]
Anytime
YES, but generally low
Is the interest
income subject to
tax?
[4]
ADB for Microdeposits linked
to microloans are sometimes
dependent on loan amount.
Insured by the PDIC for up to ₧500,000.00
Does it earn
interest?
[1]
Zero to ₧40,000.00
Microdeposit linked to
Microloans has a nonwithdrawable feature until
loan is outstanding [7]
When can I
withdraw?
[2]
Opening Balance for
Microdeposits linked to
micro-loans are sometimes
dependent on loan amount
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
What transactions
are subject to fees/
charges?
Only for individual
microfinance clients whose
average daily savings
account balance does not
exceed Forty Thousand Pesos
(₧40,000.00)
Certificate of Time Deposit
Depositors, however, must maintain
the required minimum Average
Daily Balance (ADB), as applicable.
Otherwise, they may be subjected to
charges/fees, as applicable.
[6]
Savings account designed
to cater the needs of low
income sectors, including
microfinance clients
Depending on the product
offered by the bank
Anytime
How much can I
withdraw?
MICRODEPOSIT
Pre-termination fee
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
Features may vary per bank
Only regular or ordinary time deposits are discussed. Long Term Negotiable Certificates of Time Deposits are not covered by this primer
For OFWs, opening accounts without initial deposit as well as maintaining balance may be subject to respective policies of banks
Depending on the type of deposit product of each bank or the depositor’s compensating business with the maintaining or depository bank
Average 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: 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)
Minimum ADB to earn interest is sometimes different from Minimum ADB
Only banks with Microfinance Function can offer this product
This 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