HOW SAFE ARE YOUR SAVINGS IN PHILIPPINE BANKS?

 

"Mama why are there too many people infront of  BANCO FILIPINO?  What's going on?",

"Oh, son, that bank closed-shop yesterday. They're angry they cannot get their savings"

"Why did the Bank close down?"

"I'm not so sure son, but in the news, the bank was charged of unsound banking practices, meaning, they were suppose to follow certain banking laws but they did not comply."

"I pity those people mama, they worked so hard for their money and they can't get it"

"Some of them will get their money back but will take some time. Our money in the bank is PROTECTED by another company - an insurance company which pays up to P500,000. So if you  have more than that, you probably wont get the rest of it. I'm not so sure though how else to recover more than 500,000.. maybe for a long time"

-o-

This was the scene with my 12 year old son, Nicholas, when we were walking in the malls of Greenhills last March 2011.  It was the same scene, with the same bank, I experienced when I was 10 years old. I was asking my mother too.  
What will happen to my HAPPY SAVERS CLUB Bank Account, mama? 
Mama said: Dont worry, we'll get it back. Our money is insured by an agency called PDIC.
HISTORY REPEATS ITSELF...

-o-

Banks do play a very important role in the economy through their main role as  INTERMEDIATORS - Simply put, they encourage people to save  then they borrow the people's deposits to lend it to businesses and help them grow (These businesses in turn gives jobs to the people and people who earn saves and puts it in the bank - and so is the cycle .)

Question is how safe is our deposit? The bank has various types of deposits - the regular savings and the investment products. The regular savings and checking and time deposit accounts are insured by PHILIPPINE DEPOSIT INSURANCE CORP: (PDIC) up to P500,000 per depositor. If you have 2 accounts with P500,000 each - only one is insured. They do not insure the investment products.

The PDIC has a very good article to guide the depositors. The article's no.1 tip is  "KNOW YOUR BANK" - it simply means we also have to conduct our own due diligence with the Banks we deal with. See below PDIC's 

7 HABITS OF A WISE SPENDER. 

Personally, if your bank is a conservative bank and  already has a track record, (for me it means existing say over 30 years), then there is really nothing to fear.  Second, we always have to read the news - As long as the country's economy is stable and strong and the bank you have chosen is conservative - then our deposits - whether insured by PDIC or not- will always be safe.

 

KEEP SAVING!

7 HABITS OF A WISE SAVER -PDIC 1.  Know your bank Know the owners of your bank -- the people behind it and the people who manage it. Find out and ask about your bank's finances and its strengths and weaknesses. PDIC, BSP, SEC, and your bank's websites, newspapers, magazines, television and radio will provide most of the information you need. 2.  Know your bank products Understand where you place your cash. Don't confuse investments with regular deposits. Read and understand the fine print and don't hesitate to clarify with bank personnel terms and conditions that are not clear. 3.  Know your bank's services and fees Choose the right bank for you by knowing your needs and matching these with your bank's services. Be aware of bank charges and fees. 4.  Keep your bank records safe and updated Secure your passbook, ATM, certificate of time deposit (CTD), checkbook and other bank records at all times. Have your passbook and CTDs updated every time you do a transaction. Inform your bank whenever there are changes in your contact details to avoid bank mails with sensitive information getting into the wrong hands. 5.  Transact only inside the bank* with authorized bank personnel Do not hesitate to ask personnel to present an ID and always ask for proof of your transaction. 6.  Be informed about PDIC deposit insurance PDIC guarantees deposits up to P500,000 per depositor. Investment products, fraudulent accounts, laundered money and deposit products from unsafe and unsound banking practices are not covered by insurance. 7.  Be cautious Simply walk away from offers that are too good to be true. Generally, excessively high interest rates carry more risks. Please refer to Bangko Sentral ng Pilipinas Circular 640 for more information.