Phone banking: 3% interest, no minimum deposit

MANILA, Philippines — A savings account that offers 3% interest, does not require a minimum deposit or maintaining balance and needs only a smartphone to open and maintain.

For more than six out of every 10 Filipino who don’t have any bank account, a leading mobile banking provider is offering these in a bid to bring the benefits of banking to those even in the remotest places in the Philippines.

GCash, now powered by Mynt, is bringing banking, through CIMB Bank, to those who have not experienced banking because of the sheer distance of their communities from the nearest physical bank and for other reasons.

The mobile banking service through the product christened GSave would be accessible in the GCash app and give Filipinos who have never had a bank account a 3% interest rate per annum on savings, the highest in the Philippines where regular savings accounts earn only less than 1% per annum.

The mobile savings platform heeds the Bangko Sentral ng Pilipinas’ celebration of Savings Consciousness Week from June 30 to July 6 which was mandated by Proclamation No. 380 issued by then President Fidel Ramos in 1994 yet.

In Circular Letter 2019-038, the BSP urged the Philippine banking industry to keep encouraging the public to save in banking institutions and “further raise awareness on the vital role of savings in the country’s economic development.”

At least 66% of Filipinos don’t have bank accounts and 34% of municipalities don’t have access to bank offices mainly because of the high cost of delivering banking services in the traditional way, like opening more branches, in remote areas.

But while that many Filipinos don’t have bank accounts, they were likely to have smartphones.

“We saw this as an opportunity” that inspired GSave, said Anthony Thomas, chief executive officer of Mynt, a partnership between Globe Telecom, Ayala Corp. and Ant Financial of the legendary Chinese billionaire Jack Ma.

Mynt operates GCash.

GSave would allow depositors to open an account in CIMB Bank without a minimum deposit amount or maintaining balance. Opening an account would be through GCash’s Save Money feature which would allow depositors to withdraw through GCash anytime, anywhere.

“The 3% interest rate is a big bonus,” said Thomas. “What we are really giving people is access to financial services that will help them build a better future no matter where they are. That is what financial inclusion is all about.”

Studies showed that 42% of Filipinos use their savings accounts for emergencies, 31% for education, 29% to start a business and 23% for safekeeping.

But the same studies showed that one out of every five Filipino still believed they don’t need to put money in the bank. Among those who believe they don’t need to bank, 18% said they had no documents to present for opening accounts while 10% believed it would be too expensive.

According to Thomas, the concept of GSave was designed “to address these barriers to banking and make saving money not only easy but fun.”

CIMB is a leading universal bank headquartered in Kuala Lumpur. One of the largest Islamic banks in the world, CIMB is present in 16 countries and has been awarded Best Islamic Finance House in Asia 2018, Best Bank for SMEs in Malaysia 2018, and Best Private Bank in Malaysia 2018.

(Editor: Alexander T. Magno)