A First Timer's Guide to Opening a Bank Account

As you go through your day-to-day life, it’s easy to get caught up and forget to manage your expenses, pay your bills, and save. Continuing this path can overwhelm you and leave you unprepared for any challenges that may come your way. Opening a bank account can be the tool you need to manage just that.

Banking institutions are ready to equip you with the tools you need to safely manage your money and improve your financial habits. Although not all banks may have the products and services you need to make your financial journey easier. This is why you should choose where you open your first bank account wisely and that’s exactly what we’ll help you do in this guide.

This guide will walk you through the questions you should ask when choosing a bank and the process of signing up for a new bank account, so you can open one with confidence at the right institution.

Why should you open a bank account?

Opening a bank account can improve your life in so many ways. First, it’s a safe place to store your money. Banks are insured by the Philippine Deposit Insurance Corporation (PDIC), which protects deposits up to Php 500,000 per depositor per bank.

Let’s say that a bank ran into some financial troubles and declared bankruptcy. When the bank closes, you’re entitled to get a full or partial amount of your money back as long as the amount deposited doesn’t exceed Php 500,000.

Additionally, banks also have stringent fraud protection measures. Any abnormal logins and transactions are immediately flagged, blocked, and reported to you for investigation. Banks are also proactive in reminding clients how to protect their accounts from phishing attacks so, they won’t fall victim to this crime.

Second, banks make your money accessible to you because you can withdraw cash at any time in any ATM, pay via debit card to retailers, and transfer money to anyone from the palm of your hand. Some banks even have bill payment services available on their online banking website or app.

Third, banks can help you meet your goals. Aside from providing you with a secure place to store your money, a bank’s online banking channels provide you with the opportunity to oversee all your accounts in one place. That way, you can keep an eye on your finances and adjust your financial habits accordingly.

Fourth, opening a bank account can make you automatically eligible for other financial products that can help you achieve your dreams such as auto loans, home loans, and personal loans. With the right financial institution, you can fulfill your goals for a minimal service fee.

Finally, some banks offer their account holders benefits such as life insurance, personal accident insurance, and shopping perks. If you love traveling, you can also use your debit card for a hassle-free experience wherever you may be in the world.

What should you consider when choosing a bank?

There are numerous financial institutions in the country and each one will have its own set of pros and cons.

To find the right bank for you, you’ll want to understand your goals and needs first and evaluate whether the bank can help you fulfill them.

Listed below are some items you should consider when it’s your first time opening a bank account:

Product Offerings

Banks offer a variety of account types ranging from checking, saving, and foreign accounts. Often, banks have multiple account types that are tailored to an individual’s goal or life stage.

So, the first step for you should be to figure out what account you’re looking for and see if the bank offers a product that can solve it.

For example, if you’re looking for an account for your emergency funds, you’ll need to have an account that’s easily accessible and, ideally, earns interest so it can continue to grow even when left untouched. Now, given what you’ll be using the account for, you can safely assume that opening a savings account is the best way to go.

Location

A bank’s location is another crucial thing to consider when choosing one. Ideally, you want to find a bank that’s near your residence or work. That way, if there are any problems or you need to withdraw money over the counter, it won’t be too much of a hassle to get to.

Additionally, you should also see if the bank you’re eyeing has ATM locations in areas that you frequent like malls.

Convenience

Banks are always innovating their products to make the lives of their clients much easier by making financial transactions more convenient to execute. Features such as online bill payment, money transfer, and phone loading services are just some of the innovations that banks have added to their online channels.

Another thing to consider is the user interface and responsiveness of a bank’s app. Mobile banking has become essential for everyone and you want to make sure that you’re committing to a bank that can provide you with a seamless online banking experience.

Customer Service

When you entrust your hard-earned money to a financial institution, ideally, you want to make sure that if anything goes wrong or if you have any questions, you can talk to someone. Especially when scams and hacking attempts are running rampant in the digital space.

Choosing a bank with excellent customer service can save you a lot of headaches in the long run because you know that there will be someone ready to assist you.

Trustworthiness

Before you choose a bank, we recommend investigating it thoroughly. This means going over their history, seeing how long they’ve been established in the industry, and if they’ve garnered any awards for their practices.

In the end, choosing to trust a bank with your money is something that you must discern. A good rule of thumb would be to look for known financial institutions that will likely still be standing in the future, despite economic downturns.

Interest Rate

Different types of accounts can differ in interest rates and maintaining balance to accrue interest. All savings accounts have an interest rate but can differ depending on the banking institution.

Formerly, checking accounts weren’t known for offering interest rates, but now, that’s changed. Some banks make use of tiered interest while others may just have one rate across the board.

Average Daily Balance (ADB)

Before you choose a bank or a product, you should first see if you can maintain the required Average Daily Balance (ADB). The ADB is the amount you need to keep in your account to ensure that you aren’t charged a service fee at the end of the month.

Banks calculate for your ADB using the following formula:

Ending daily balance for the month / Total number of days in the month = Average Daily Balance

ADBs can range between zero to Php 40,000 depending on the type of account you open.

Long-term Plans

Finally, opening an account with a bank is just the first step to securing your future. You must think long-term and think about whether the bank can be your lifelong partner or not. This means checking if they have services such as home mortgages, car loans, and personal loans for your future.

Also, it’s good to remember that the relationship you establish with your bank can affect the terms of your loan.

What are the types of accounts?

As we’ve mentioned above, banks offer different types of accounts to cater to different needs, life stages, and lifestyles. In this section, we’ll talk about three types of accounts that you can look into:

Savings

Savings accounts are designed to help you jumpstart your financial journey with their low initial deposit, ADB, and high-interest rates. This type of account is great for storing your goal money, emergency funds, and extra cash. However, you should still remember to meet your ADB, or else you can be charged a service fee.

A savings account will usually come with a debit card, which you can use to withdraw money from an ATM or over the counter.

The low maintaining balance of savings accounts and its PDIC protection make it ideal for people at any stage of their life who are ready to save for their dreams.

Checking

Current or checking accounts are more expensive to open and maintain than regular savings accounts but it’s also insured by PDIC guaranteeing your money’s safety. These types of accounts are best used for managing expenses and making purchases.

For those with responsibilities such as home loans, rent, and tuition payments, a checking account is the best way to go. Why? Because you can easily move large sums of money and write post-dated checks to ensure that you’re paying off big expenses in a timely manner.

New checking account owners will be issued a passbook and a checkbook by their bank. Some banks may also give them the option to avail themselves of a debit card for easier cash withdrawal purposes.

Foreign Currency

Finally, for individuals who have a considerable amount of money in a different currency, you can open a foreign currency account. This type of account can help you save money and accrue interest in the currency deposited.

Foreign currency accounts are a great place for OFWs and people who like to travel to store their money. Holders of this type of account can experience the ease of converting their money from one currency to pesos without visiting a currency exchange establishment.

These types of accounts come with a passbook to help you monitor the flow of your money. It can also come with a debit card so you can easily withdraw pesos in an ATM.

In the Philippines, most banks offer the following foreign currency accounts:

• US Dollar
• Euro
• Canadian Dollar
• Australian Dollar
• Japanese Yen
• British Pounds
• Swiss Francs
• Chinese Yuan

How do you open a bank account?

First time bank account applicants will be required to round up several items before they can successfully open an account. Whether you’re applying online or in person, here are the requirements you should prepare before you get started:

Valid IDs

Valid IDs in the Philippines fall into two types of categories: primary and secondary. If you have a primary ID, you only need to present one to the bank. However, if you have a secondary ID, your bank may require you to present two types of ID.

Primary IDs

• Driver’s License
• Passport
• School ID
• Persons with Disabilities ID
• Senior Citizen ID
• Postal ID
• Social Security System (SSS) ID
• Government Service Insurance System (GSIS) ID
• Professional Regulatory Commission (PRC) ID
• Integrated Bar of the Philippines ID
• Voter’s ID from the Commission of Elections
• Maritime Industry Authority (MARINA) ID
• Firearms License from the Philippine National Police
• Alien Certification of Registration
• Government Office ID

Secondary IDs

• Tax Identification Number (TIN)
• Barangay Certificate
• Company ID
• DSWD Certification
• NBI Clearance
• Police Clearance
• Seaman’s Book
• City Health Card

Initial deposit

Depending on the type of account you’ll be opening, make sure to check online how much you’ll need to set aside for the initial deposit of your new account.

Proof of latest billing

Banks will ask for proof of the latest billing document to confirm your address. You can bring any of the following documents for this:

• Credit card statement
• Utilities bill (Ex. Meralco, Maynilad, Manila Water)
• Mobile phone bill
• Bank statement
• Rental Agreement
• Insurance Statement

How to open a bank account online?

Nowadays, opening a bank account can easily be done from the comfort of your home. When you open a bank account online, all you need to do is have your documents scanned and ready so you can easily upload them on the bank’s website after you fill out the customer information form.

Once your application has been accepted, wait for a directive from your bank so you can accomplish the last step of opening an account, which is to make the initial deposit.

The window to make the initial deposit can range between one to two weeks depending on the bank’s protocols.

How to open a bank account in a physical branch?

Opening a bank account in a brick-and-mortar branch may require you to physically show up, but it can be a much more convenient option for those who are eager to start their financial journey. This is because you can open an account, get your card, and change your ATM card’s PIN on the same day.

The first thing you need to do is to talk to a representative and tell them about what type of account you want to open. After this, they’ll give you a customer information sheet to fill up and submit. Some banks may ask for a copy of a 1x1 ID picture of you for their records.

Once you’ve finished and signed the forms, the bank’s representative deposits your initial deposit and gives you your new debit card.

Why should you choose RCBC for your first bank account?

By now, you must be excited to open a new bank account in your chosen financial institution. If you’re still unsure about which bank to turn to, you can trust RCBC to be with you every step of the way.

RCBC is known for its innovative products and services, making it one of the Philippines’ most prestigious banks. With over a hundred branches and thousands of ATMs located across the country ready to serve you, it’s no surprise that RCBC has remained to be one of the most respected financial institutions in the country.

Choose to open an account with RCBC today and rely on a bank that’s ready to support you on your financial journey. Visit our website today to learn more about our products.