As you gained experience in saving through your regular savings account, you might plan to do the next logical step. That is to open a Regular Passbook Savings Account.
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| "silver-and-gold-coins" by Pixabay is licensed under CC0 |
Passbook accounts offer a more secure way of saving and withdrawing funds because you will need to personally go to the bank to do the transaction. Unlike ATM cards where you can just pull your funds practically anywhere and anytime as long as there is a functioning AT Machine.
Advantages & Disadvantages of Passbook Savings Account
Advantages
- Offer a more secure way of depositing and withdrawing funds.
- Builds your habit of savings because you need to personally move to process the transaction.
- You funds are recorded on the passbook ledger, which serves as tangible proof of your progress.
Disadvantages
- In case of emergency, you can't liquidate the funds directly because the withdrawal process involves a personal bank visit.
- Depositing may be a hassle if you don't have any banks branches in close proximity.
- Client traffic may cause the transaction to take awhile.
Does the Passbook Account Interest Rates Offer a Good Deal?
If you are just opening a regular passbook account (there are advance type of accounts), then interest rate is pretty much the same with the regular ATM savings account.
In this article series, I will list the interest rates of a Regular Passbook Savings account offered by 8 known banks in the Philippines.
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| Regular Passbook Savings Interest Rates Offered by Banks |
As you can see, 0.125% interest per annum is next to nothing if you are just depositing a small amount. To put it into perspective, for the interest to reach at least Php 1,000, you need to deposit Php 1,000,000.
Click here to use the Annual Compound And Simple Interest Calculator to calculate your interest earned overtime.
As you are just starting the habit of saving, a regular savings account is good first step. But once you gain knowledge financially, you must venture out to other investment vehicles if you are hoping to grow your wealth.
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