Some people enjoy trying on clothes. I like to try on banks.

I’ve opened accounts with many banks for the last four decades and for vanity’s sake, let me add that I started with children’s accounts. For some of them, I opened an account based on recommendations of family and friends, and later realized that what was good for them was not necessarily good for me.

As my income got better, I also learned that being loyal to one bank was not in my best interests. When I started to travel for work and leisure, I discovered the convenience of regional and multinational banks. Once I began investing, I found out that some will reward me with better returns and have more diversified products.

If you’re looking for a new start for your finances in 2024, shopping for a new bank should be top of your list. Shopping does not necessarily mean you will leave your other bank or banks. It just means you will look around for options, try them on for size, and see if a new bank will better suit your needs, which may be changing this year.

Choosing the right bank can help you grow and protect your money. Being with the wrong bank however, can cost you. When shopping for banks, here are things you may want to consider.

#1 What’s your type: traditional or digital?

Traditional banks are those with branches that you can walk into and can be found in many locations around the country. Digital banks are those with fully online accounts and all your transactions are done from your phone or computer. Some people prefer traditional while others like the convenience of digital. Each has pros and cons and you should choose depending on your needs. For example, I like traditional because I can walk into their branches for more complex transactions. But for regular savings accounts, they pay very little interest. Digital banks do not have physical branches which means they have lower operating costs that’s why they offer more generous interest rates for savings accounts.

#2 Decide on your must-haves

You may be able to choose better between traditional or digital if you know what’s important to you and what you will need from your bank. If you like coming to a branch for over-the-counter transactions, then traditional may be better for you. But if you have a full work schedule and hardly visit the bank, then a digital bank with round-the-clock access all 7 days of the week is a good option. The banking product you need will also help you decide. Is it just for savings? A payroll account? Checking account to settle regular bills or loan payments? Time deposit placements or riskier investments? When you know what you want to do with your money, you can better compare your options.

• Growing your money: Should you put your savings in digital banks?
• PH digital banks' impact remains limited: Fitch Ratings

#3 Watch those fees

You may have heard this saying: “The best things in life are free.” When it comes to fees, I have taken the liberty of rephrasing it to: “The worst things in life are fees.” It’s become a habit to always check for fees, especially hidden ones that become nasty surprises when your account statement arrives. If you’re signing up for any bank product, make sure to learn all the fees that are part of it: from account maintenance fees to ATM withdrawal fees to other transaction fees. Recently, I learned that one of my banks will charge me for depositing to another account from another region. By going to one of their Metro Manila branches, I’ll have to pay between P50 to P1000 when I make a deposit to an account that was opened in Cavite. Not all banks charge the same fees, and some don’t charge any, so consider this before choosing your bank partner and product.

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#4 Grow your money

Banks typically pay interest for savings, but some now pay zero or so little that it feels like zero. You can get a quick scan of bank interest rates online from their websites because they are required by the regulator to disclose this. Based on your savings habit and personal banking needs, choose the one that will help you grow your money. Here’s a tip: make sure to check not just how much is the interest rate, but how much balance you need to have to earn it. Many banks now have different balance requirements: one to open an account, another to maintain it and not be charged a fee, and another to earn interest.

#5 Protect your money

In the Philippines, the government provides a maximum deposit insurance coverage of P500,000 per depositor per bank. This will cover all types of bank deposits in the said bank. So if you have a savings account, a checking account and a time deposit in a bank, and your balances across all three total P750,000, in the unfortunate case that the bank will go bankrupt, the most you can claim is P500,000. Because of this, those who have P500,000 or more prefer to diversify and place their money in more than just one bank. On top of this, some banks also offer additional protection for free, from accident insurance to life insurance, if you meet the conditions and maintaining balance required. Always read the fine print to avoid fees and to reap rewards, if any.

ABOUT THE WRITER
Aneth Ng-Lim returns to writing after more than two decades of working as a communications specialist in the government and the private sector. Her advocacy for financial inclusion and personal finance began when she served as head of Consumer Education during her stint at a multinational bank.