Checking account 101: Why you need a checking account

Many young urban professionals in the Philippines have savings accounts. According to a study, 77% of millennials feel financially confident, with 41% reporting that they set aside money each month for saving. This is the first step towards being financially wise as they start setting aside some money to manage their personal finances.

Similar to having a savings account, a checking account has its own purpose. Here’s what you need to know about checking accounts and situations where they can be useful.

What is a checking account?

A checking account is a deposit product that comes with a checkbook for funds disbursement. Checking Account products may also come with a Debit Card to enable account holders to access their funds anytime through ATMs, Point-of-Sale Machines, or for online purchases. While a savings account encourages you to set aside funds for future use, a checking account on the other hand, is a tool to help you manage your transactions.

Why do you need a checking account?

While debit and credit cards have become the norm, checking accounts are still widely used by many in the country for practical reasons. Most companies in the Philippines still require the use of post-dated checks for a number of transactions such as loan payments, rent, or amortization. Checks provide a sense of security for landlords or condo owners that their tenants are bound by an obligation to fund their checks versus monthly cash payments.

Here are some other situations where a checking account can be advantageous.

• Keeping track of your budget- Having both a savings and checking account is a great way of managing your expenses and savings. For every paycheck you earn, set aside your savings in a savings account and your expenditures in a checking account. This way, it is easier for you to avoid touching your savings while being fully aware of how much money you have for your expenses.
• Paying large amounts- For your car or home loans, payments done via bank transfer or debit cards are impractical, unless it’s on Auto-Debit Arrangement. A checking account offers a convenient way to pay using checks. Cash is a possible option, but carrying large amounts of cash is often unsafe.
• Keeping your account secured- A check cannot be authorized unless it has your signature. And even if someone gets their hand on a signed check, the bank is only authorized to release the money to whoever is named on the check.
• Paying recurring bills- Fixed recurring bills, like rent, can be paid with post-dated checks. As mentioned above, checks serve as a form of a bond between you and a lender, landlord, or biller. It also provides additional convenience to you since you just have to transfer the account to your checking account, and it’s good as paid.
• Avoiding additional service fees- Some bank accounts charge fees for withdrawals, cashing in checks, and other services that can add up to a significant amount of money. Checking accounts are designed for spending, which means a smaller or minimal fee is charged whenever you make a transaction.
• Creating an electronic trail- Unless you receive an official receipt as proof of your payments, cash payments are hard to track. Checks come with serial numbers, making them easier to record. You can specify who is authorized to cash in a check, protecting your money. You can also track where it goes and to whom it should go later.

If you haven’t opened a checking account yet, now is a good time to do so. Alongside your savings account, your checking account can help you track expenses and make spending practical and safe. Manage your needs better by opening a checking account at Metrobank. By opening an all-in-one checking account, you get to enjoy the benefits of having a passbook and debit card to help you monitor and access your funds. This checking account product requires PHP 25,000 maintaining balance and offers interest for a monthly average daily balance of PHP 50,000.

If you want a checking account that has a lower maintaining balance requirement, you can open a regular checking account which also comes with a debit card. This non-interest earning checking account product requires PHP 10,000 as maintaining balance.

We’re excited to be part of your financial journey. To open an account, visit the nearest Metrobank branch and bring one valid ID with your signature and photo, as well as your initial deposit. To learn more, visit https://metrobank.com.ph/save/checking