Best Digital Banks in the Philippines

With the ECQ happening in the Philippines, going to banks for errands and transactions is becoming near impossible.

I’ve never liked having loads of cash in my ATMs, for many reasons:

• the <1% interest does not make sense against the 6% inflation rate, there are several other better vehicles to keep my money for safekeeping, and
• I needed a circuit breaker for my over-spending tendencies.

• Read more tips on Money Management – How to be Frugal and 5-Step Financial Guide

When my friend told me about virtual banks and the high-interest rates, my interest also piqued. 4% interest? How’re they supposed to do that?!?

I did my research, opened a few virtual bank accounts, and ready to share with you my experience to the readers. I have since then put up my emergency fund here versus in money market securities. Since COVID has given us more volatility and more uncertainty, it’s a lot easier to put the money here.

• Read: COVID Shock Leads to Filipinos Increase Interest in Healthcare, Insurance, and Digital Usage

If you’re interested in knowing more about digital banks and digital banks in the Philippines, read on.

FIRST OFF: What is a Digital Bank?

The term ‘digital’ seems confusing because most traditional banks now have digital, online, and mobile capabilities. With these services, clients can do basic banking transactions (such as fund transfer, bill payments, etc.) over the internet or app.

Fully Digital Banks are banks that have no physical branches or bank tellers. All banking transactions are done digitally via the mobile app.

Because of the low overhead (rent, manpower, equipment) versus traditional banks, digital banks can give better rates up to 4%, as well as no transaction fees. This makes the interest 5x higher than traditional banks!

Benefits of a Digital Bank

• No lines
• Higher interest rate (2.5% to 4%)
• No transaction fees
• 100% convenience
• 24/7 access
• Paperless (more eco-friendly!)

Personally, I suggest you to keep a good mix of both traditional and digital banking services. There are still a few obstacles in digital banking (e.g. no ATM, cybersecurity, etc.) It depends on your needs.

Best Digital Banks in the Philippines

ING

ING is the most well known digital bank in the list–available in 40 countries with almost 40 million customers.

There is a promo offer until July 31, 2020 – 4%* interest rate for old and new ING bank accounts. After July 31, interest rate is 2.5%*

ING Features:

• 4.1% interest rate (minus 20% withholding tax)
• No required minimum balance
  * 4% interest rate (2.5% after July 31) for balances up to P10 million
• * 1% interst rate for any additional balance above P10 million

CIMB

CIMB is a global virtual bank based in Malaysia and available in more than 16 global markets.

CIMB has multiple banking solutions on their OCTO mobile app, including UpSave Account, GSave account (in partnership with Gcash), among others.

CIMB Features:

• 4% interest rate
• No required minimum balance
• UpSave – Free Life Insurance for up to P2 million with a minimum average balance of P100,000
• Fast and Fast Plus – Free debit card for ATM transactions

How to Open a CIMB Upsave Account (link)

GSave

In partnership with CIMB, Gcash has launched GSave with high interest rates and easy access to deposit and withdrawals via the Gcash app.

GSave Features:

• 4.1% interest rate (minus 20% withholding tax) until July 31, 2020, 3.1% after
• No required minimum balance
• Free Life Insurance up to P1 million on accounts with P100,000 Average Daily Balance

You can also connect your GSave and CIMB PH App to get the 10% interest promo for the first month! Promo is valid until December 31, 2020.

Read more: Gcash Invest vs. GSave

How to Open a GSave Account

Other Digital Banks in the Philippines

• UnionBank. Awarded ‘Best Digital Bank’ for three straight years (2017-2019) by Asia Money. Very easy check deposit capabilities – just take a photo!
• Komo by Eastwest Bank is set to open for business this year with 3% interest per annum
• DiskarTech by RCBC aims to provide ‘sachet banking services’ to millions of ‘unbanked’ Filipinos with a 3.25% interest rate.
• TONIK Digital Bank is a Singapore-based digital bank and the first to receive a digital-only banking license by BSP (Bangko Sentral ng Pilipinas)

Sources:

• Finastra – Digital Banking Overview in the Philippines