Your Savings Can Earn Up to 10 Times More in this Digital Wallet Than When Kept in Traditional Banks
It's not much, but savings accounts offered by traditional banks do provide interest.
The variation largely depends on the maintaining balance demanded by a specific savings account type. For that 1.75 percent yield, the bank requires the account holder to maintain a balance of P30,000 monthly.
To be fair, savings accounts are not entirely meant to be investment instruments. But wouldn’t it be nice to see your money grow even when you’re just keeping them safe somewhere? Or perhaps, in a mobile app?
Mobile wallet GCash quietly rolled out this very instrument to select users this week. In its newest bid to turn cash-loving Filipinos to go cashless, GCash, in collaboration with regional bank CIMB, has launched a savings account feature in its app.
Existing GCash users, which the company claims now number at 20 million, can save as much as P50,000 in the app and see their money earn 2.3 percent in the course of 12 months. Like a traditional bank, the deposits are insured by the Philippine Deposit Insurance Corp.
“There’s no minimum balance [to keep a savings account in the app]. And there’s no minimum balance to qualify for the 2.3 percent interest rate. So, even if you have P1 in the account, you can already earn 2.3 percent off of that,” Patrick Cuartero, CIMB’s chief marketing officer said.
CIMB, which is based in Malaysia, is one of the leading banks in the region with
While unconventional, CIMB’s strategy is unsurprising especially in the Philippines where 70 percent of its population, or at least 70 million people, are online. This is higher than the world’s average Internet penetration rate of 59 percent. That number is also much higher than the number of Filipinos that own a traditional savings account at around 15.8 million, according to Bangko Sentral ng Pilipinas (BSP).
CIMB’s strategic partnership with GCash may also allow it to gain new patrons for the banking service, as one of its executives said GCash’s savings account may eventually be merged into a traditional bank account.
To be sure though, this does not mean that only GCash users may sign up for the product. New users may sign up for a GCash account and they may already apply for a savings account right after.