Important Things to Know about Banking

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Online Banking – How Useful Is It?

Data published by the Bangko Sentral ng Pilipinas shows that as on June 2016 there were a total of 121 banks (including 35 universal / commercial banks, 34 thrift banks and 52 rural and cooperative banks) that offered electronic banking facilities like Internet and mobile banking.

What is online banking?

To put it simply, online banking refers to the conduct of banking through electronic banking channels – this is an umbrella term for Internet banking, mobile banking, phone banking, banking through mobile apps etc.

How useful is online banking?

Let us look at what is possible through online or electronic banking through a couple of real-life examples:

 ▪ The Philippine National Bank offers a bouquet of eBanking Services including Internet banking, phone banking, SMS banking and ATM banking.  

PNB's Internet Banking allows you to:

▫ Monitor your account balances and transactions 

▫ Transfer funds 

▫ Pay bills 

▫ Open accounts 

▫ Schedule payments and fund transfers and program recurring transactions 

▫ Order checkbooks 

▫ View, download and print transaction history online 

▫ Get notifications via emails or text messages regarding your transactions. 

▪ Citibank offers a plethora of online banking services including Internet banking, banking via mobile app and banking via mobile browser. Highlights include: 

▫ Tracking and managing your accounts 

▫ Making bill payments online – either by having bills charged to your credit card or debited against your bank account. 

▫ Transferring funds – either locally between your Citibank accounts or to other bank accounts or globally to your Citibank accounts across the world or to another bank. 

▫ Requesting call backs from the bank through the Call Me Back Service. 

▫ Managing all your Citibank accounts worldwide through a single platform when you log on to your Citibank Philippines account. 

▫ Ordering Peso / Dollar checkbooks. 

▫ Viewing interest rates and foreign exchange rates. 

▫ Changing ATM Pins. 

▫ Open Time Deposits. 

▫ Opening a Checking or a Savings Account. 

▫ Nicknaming your accounts for easier identification while operating. 

▫ Converting single-receipt credit card purchases of Php 5,000 or more into installment payments via Citi Paylite. 

▫ Redeeming Citibank Rewards points for gifts or mileage. 

▫ Monitoring credit card usage through category-wise graphs. 

▫ Applying for a credit card or for supplementary credit cards. 

▫ Changing credit card cash advance PIN. 

The above will give you a fair idea of what you can expect to do through online banking. But, keep in mind the specific array of services that are available through online banking will differ from bank to bank.

 

Easy steps to open a bank account in the Philippines

In this edition, we will take a fresh new look at a staple of banking – we will examine how one can go about opening a bank account – whether a savings account or a current/checking account. We will do this by looking at the account opening processes used by a few banks:

Account Opening – UnionBank

UnionBank has a simple account opening process. This involves:

▪ Presenting at least one valid ID – This could be a Passport, a Seaman's book, Driver's license, NBI clearance etc. The ID should not have expired and must include your photo. Sole Proprietorships, Resident Foreigners or Aliens need to present other acceptable forms of ID.

▪ Visiting the branch to complete the account opening form and signing on the signature cards.

Account Opening – Security Bank

Security Bank offers customers a couple of options when opening their accounts. The first option involves filling out an easy online account opening form, collecting the reference number sent via SMS to your mobile and presenting yourself to the bank with one primary ID or two secondary IDs along with the given reference number; the branch personnel will help you complete the account opening process.

The second option, “Switch” involves the bank visiting you! In this process, someone from your preferred branch will visit you and help you with the account opening process. The bank representative can be verified through the unique reference number sent to you by the bank, by their ID or by calling up and confirming with the branch.

▪ HSBC and Citibank follow similar account opening processes – you will need to fill out an online form and someone from the bank will contact you to take the process forward.

Requirements and norms to be fulfilled

There are a plethora of savings and current account products available. It is important to understand that these products will have varying opening and maintenance balances. Let's look at a couple of examples:

The UnionBank Regular Savings Account requires an initial deposit of P30,000, a minimum ADB (Annual Deposit Balance) requirement of P30,000 and a minimum ADB of P50,000 to earn interest. For the UnionBank Dollar Access account, the initial deposit is US$1,000, the minimum ADB requirement is US$10,000 and the ADB to earn interest is US$25,000.

The Citi Bonus Saver Account requires a minimum opening balance of P50,000 subject to Total Relationship Balance (TRB) of P100,000 per month. This account pays a base bank interest rate of 0.70% p.a. and bonus interest if your account grows month-on-month by at least P5,000; you can earn as much as 1.90% gross p.a. after 12 consecutive months of growing your average balance. 

Choose the best Visa card in the Philippines

Visa, like its counterpart MasterCard, is a global payments processing network. Visa, in conjunction with its affiliated banks and financial institutions, offers a range of credit and debit cards. As per statistics published by the Bangko Sentral Ng Pilipinas, there were 18 credit card issuers as of 30^th September 2014. So, let's get down to the nub – how do you go about choosing the best Visa credit card in the Philippines:

Is there one best credit card?

We've said this earlier, we've said this often and we'll say it again: there is no one best credit card. How could a card that offers you Air Miles at the drop of a hat benefit you if you have no plans of flying anytime soon? How could an ultra-Premium credit card that provides you with loads of perks and privileges benefit you if you are not meeting the required income eligibility norms? What, we will do here is outline a process that will help you identify those Visa cards that best suit your requirements.

Could a debit card be more suitable for you?

Okay, lets return to the basics: a credit card is a loan product; an unsecured line of credit, to be more technically correct. If you are prone to impulsive purchases or splurging tendencies you should consider things carefully before you go in for a credit card. It is not like there are no alternatives.

Debit cards can give you most of the benefits of credit cards and because they are not a loan product you do not need to specifically apply for one. You will also not need to fulfill a range of eligibility criteria, carefully track usage etc. Visa offers a range of debit cards through affiliated financial institutions in the Philippines including Visa Classic, Visa Gold, Visa Platinum, Visa Signature and Visa Infinite.

Have you checked out the Visa range of credit cards?
 

 

Visa's credit card range in the Philippines also includes Visa Classic, Visa Gold, Visa Platinum, Visa Signature and Visa Infinite. Check the features available on these cards and check these cards with a few issuing banks to understand their eligibility norms. You will understand the cards that you are eligible for.

Have you analyzed your shopping / spending patterns?

List out all your spends, both big and small, and group them into categories. Categories could include groceries, petrol spend, spend on utilities like gas, electricity, telephones, clothing, dining and entertainment etc. Analyzing your spends category-wise and identifying high-spend categories will help you choose a credit card that gives you the most rewards for your highest spending categories. This enables you to maximize the rewards and benefits you earn.

Do you know the main credit card categories?

There are cashback cards. There are shopping cards. There are air mile cards. There are gas cards. And, there are reward cards. And... a few more. Try and understand the different types of credit card categories and their main features.

Now, that you have the basic contours in place, its time for you to shop around – check individual credit card offerings and zero down to the one that fits you best.

Interesting Facts About Mobile Banking

Mobile banking is the provision of banking services through mobile technology and mobile devices including smartphones. Let us look at a few facts and developments with relation to mobile banking and mobile money in the Philippines:

▪ As of end-June 2015, there were 638 operating banks with 9,890 branches and 268 of these banks were offering various e-banking services such as electronic wallet, cash/remittance products, Online banking, phone banking, mobile banking and hybrid mobile/Internet via BancNet-MegaLink switch banking service in the Philippines.

▪ It has been estimated that more than a third of Philippines' 1,600 cities and municipalities do not have banks. However, the ratio of mobile SIM cards to the Philippine population was at about 114 percent.

▪ According to the World Bank, about 50 million Filipinos do not have a bank account. This has led the Bangko Sentral Ng Pilipinas (BSP) to allow banks and mobile services companies to offer mobile-banking accounts in 2009 through its “Guidelines on Use of Electronic Money”.

▪ By 2014, there were 27 million mobile money accounts, more than half the 45 million traditional bank accounts in the country. The value of transactions conducted through these accounts rose to just under US$700 million a month.

▪ According to a study done by the Better Than Cash Alliance, it is estimated that 99% of payment transactions per month are done in cash, with businesses and individuals making only 1% and 0.3% electronic payments respectively in 2013. E-commerce also makes up less than 1% of total commerce.

▪ As a key part of its commitment to the National Strategy for Financial Inclusion, the BSP  together with industry stakeholders, launched the National Retail Payment System (NRPS) Framework on the 09^th of December 2015 at the BSP Executive Business Center.

The vision of the NRPS is to create a safe, efficient and reliable electronic retail payment system that is interconnected and interoperable. With the NRPS, the BSP hopes to increase the 1% share of electronic retail payments to at least 20% by 2020. The full NRPS could be up and running by mid-2017.

Mobile banking in the Philippines is offered through the following forms:

▪ Through SMS – Here, you use SMSes to conduct transactions, both financial and non-financial. Take the PNB Mobile Banking service, for instance. Through this service you can enquire about your account balances and last transactions / remittances, transfer funds immediately to family and friends and pay bills from wherever you are.

Another variant of this service is the SIM Banking service offered by BPI. If you are a subscriber of Globe / TM or SMART you can access a range of banking services through your phone's SIM menu. If, for instance, you are a SMART subscriber, you can make balance enquiries, transfer funds, make bill payments, reload prepaid phone / SMART Bro and reload SMART Money.

▪ Through your phone's browsers – Citibank offers a Banking via Mobile Browser service (in addition to its apps). Through this Mobile Banking service you can pay bills, transfer funds, view account details/summary and some more transactions.

▪ Through Apps – Many banks offer mobile apps which you need to download and use. BPI, in addition to its SIM Banking service, offers mobile banking apps for Android, iOS, Windows and BB10 OS phones. HSBC offers its Mobile Banking app, for iOS and Android phones, through which you can access all your HSBC bank and credit card accounts.

How to get an easy cash loan from banks in the Philippines?

You may want cash to finance your dream vacation or the purchase of the latest “hot” gadget. You may want cash to buy necessary appliances for your home and family, to renovate your home, to pay for your kids' education, for a medical emergency, a home renovation or for any purpose under the sun.

Cash loans, or, as they are better known, personal loans, can help you meet your immediate cash requirements. In fact, cash loans or personal loans are a very popular financial product. Data published by the Bangko Sentral Ng Pilipinas has shown that consumer loan borrowings in the Philippines as on end Dec 2015 totalled 1,060.888 billion pesos!

Here, we will look at how you can easily get yourself a personal loan:

Check out online loan calculators – There are loan calculators available on the websites of several banks. You can use these to calculate your monthly repayment amount given the loan amount and repayment tenor.

Citibank's loan calculator is an example; you will need to enter the loan amount you are looking for and the tenor of repayment (6 to 60 months). The calculator will tell what your monthly installment would be.

Security Bank's loan calculator requires the loan amount sought for, the tenor of repayment and your gross monthly income. It will calculate your eligibility and return the monthly installments that you will need to repay.

Review your budget – Make a simple list of all your current cash inflows (income) and outgoings (liabilities and expenses). Check out what your surplus is. Remember, that the monthly repayments you calculated using loan calculators as described above will need to come out of this surplus. If your surplus cannot support your monthly repayment, you may need to scale down your loan expectations.

Keep tabs on eligibility requirements – Make sure that you are meeting the eligibility norms laid down by the bank that you are seeking a cash / personal loan from. Check out the following examples from a few banks:

EastWest Bank – You must be a Filipino citizen, you must be at least 21 years old and not more than 65 years upon loan maturity. Finally, your gross monthly income should be at least PhP 15,000 or your annual income should be not less than PhP 180,000.

Maybank – You should be a Filipino citizen, at least 23 years old and not more than 55 years when your loan matures. Your home or business address should be within any of the bank's service regions.

If you are employed, you should be with your current employer for at least 2 years. Your employer should be one of the top 7,000 companies in the Philippines. And, you should be at a supervisory level with a minimum basic salary of PhP 18,000.

If you are a professional or business owner, you should have been in the same profession / business for at least 5 years. Your business should show at least 2 continuous years with profitable operations with an average monthly income of PhP 200,000.

Citibank – You must be between 21-65 years of age, a Filipino resident or a local resident foreigner with a valid Philippine billing address and you must have a minimum annual income of PhP 250,000. You should also be holding a principal credit card – at least 1 year if from other banks and 6 months if it is a Citi card.

Be prepared with necessary documents – You will need to submit a number of documents essentially to establish your identity and income. Being prepared with all the required documents will lead to a faster processing of your loan application. Refer to the image below to understand what documents will be required of you:

How to use an online loan calculator?

Even before you take a loan, it is important that you plan properly for it. One important tool that many banks have made available on their websites is the online loan calculator. Using an online loan calculator can actually help you plan your loan / financial commitments better. Here, we will examine how in a little more detail while also providing real-life examples of online loan calculators:

Using an online loan calculator

You will need to open the calculator, enter your current income details and your loan requirements including the amount that you are looking for, the tenor of your loan, fixed or floating rate of interest etc; the loan calculators will help you understand the quantum of loan that you are eligible for and will help you determine the monthly repayments that you can afford given your financial commitments. 

Examples

• The Housing Loan Calculator from Security Bank requires you to enter your annual income, the worth of your desired property and the loan tenor (from 1 year to 20 years). The calculator returns the loan amount eligibility, the down payment required and the monthly payment required of you. The calculator also returns a recommendation with regard to the maximum worth of a property that you can afford given your income levels.

• The Loan Calculator from Citibank is meant for use with personal loans. You enter a loan amount and tenor in months and the calculator on returns the monthly installment.

• MetroBank’s Home Loan Calculator requires that you fill in your name, your preferred interest fixing period, your desired loan amount, your gross monthly income and your preferred loan tenor in years (1 year to 20 years). Upon entering the required details and clicking “Compute”, the Calculator returns the monthly amortization amount, the income requirement based on your loan amount and the amount you can borrow based on your gross monthly income. There is also a facility to send the results to your email ID.

• The Auto Loan calculator from BPI Auto Loans requires you to enter your loan amount, your down payment in percentage terms (10%, 20%, 30%, 40% or 50%) and payment tenor (12 / 18 / 24 / 36 / 48 and 60 months).

Third-party websites

There are also third-party websites that provide you with loan calculators as well as a selection of loans from various banks based on the details that you provided.