If savings accounts were like the best friends you’ll meet in life

When it comes to financial planning, learning how to save money is like nurturing friendships — the more time and resources you put in, the more rewarding things become. And like our friends, there are different types of savings accounts, and each comes to you with a special purpose.

Here are the five types of savings accounts and why they’re like the best types of friends you’ll meet in life.

Regular Savings Account — Your day-one

Like your day-one friend, your savings account is your go-to. It’s likely the first type of savings account you’ll get to know.

Regular savings accounts are interest-bearing accounts that require an initial deposit and a maintaining balance. Like your day-one friend, your relationship with a regular savings account can be solid, and reliable — just make sure you keep putting in the effort.

The best part, like your day one, there are a number of ways to keep in touch — via ATM card, online banking, and direct deposit.

When do you need one? You usually open your first regular savings accounts while you’re still in school, as a way to receive your allowance. Now as a working adult, it’s the most basic and accessible financial tool that you can use to start saving your hard-earned money.

Time Deposits — The one you almost never see or talk to

We all have that one friend we almost never see or talk to but when we do, we pick up right where we left off. It doesn’t matter how little contact you have, the friendship just grows.

Time deposits are like your regular savings accounts except there’s a set period of time, called term, that you can’t withdraw your money (usually 30, 60, or 90 days). This type often comes with a higher interest rate, and it gets higher the longer you lock your savings in. And if you withdraw before then, you’ll usually need to pay a fee.

Like the friend you almost never see or talk to, it’s still good to catch up every once in a while. Maybe now’s the time to check in on them.

When do you need one? If you’re saving up for something big in the near future, say a big trip, a new laptop, or a downpayment for your first car, putting it in a time deposit account may be a good idea because they have relatively higher interest than regular savings accounts.

You can open a time deposit with PHP 10,000 for a term as short as one month at 1.25% interest on Metrobank Online. Your PHP 10,000 will earn you around PHP 10 per month. While this doesn’t seem like much but if you keep renewing your time deposit, possibly even adding more money as you continue to save, it can grow even more thanks to compound interest. And remember, you’re really just parking your money there until you have enough for that big purchase.

Joint Savings Accounts — The one who always has a plus one

Maybe they’ve been together forever, maybe it’s something new and blossoming, but these two (or three) always come as a package.

Joint accounts are savings accounts that are shared by two or more individuals. It’s great for people who want to build their savings together.

Like the “or” option that gives joint account holders equal access to the funds, when you tell one a secret, you better already assume the other will soon know about it, too.

When do you need one? To be clear, you don’t have to be married or in a relationship to open a joint account. Joint accounts can be shared between siblings, parent-child, or business partners — so long as there’s a need for your to share access to a savings account.

Current/Checking Account — The one who makes sure you keep your promises

There’s that friend who makes an honest person out of you. With this friend, you need to make sure that you’ll only make promises you can keep. Otherwise, you risk paying a hefty price (at the very least, a long period of tampo) for breaking their trust.

A current or checking account is technically not a savings account because it’s mostly used for more formal transactions that require a guarantee on future payments like paying for monthly rent on a long-term lease. But, there are some checking accounts like Metrobank’s AccountOne, that also earn interest, making them great to use for savings.

Like your friend, this account comes with a fair warning: you should only issue a check you can fund. Otherwise, you’ll pay a penalty, and even risk a brush-in with the law. But keep your word with AccountOne, and you get to grow your savings faster.

When do you need one? Opening a checking account is almost like a rite of passage. It means you’re ready to be held accountable for a long-term commitment. For most people, checking accounts become a necessity when they begin renting an apartment or a house. On top of paying an advance and deposit, most landlords ask for post-dated checks as a way to guarantee your monthly rental payments.

Now that you’re making your own money, make sure you have a good, steady relationship with your savings account. Just like a good and fulfilling friendship, you’d want to put some effort into this relationship. Ready to find out which savings account is best for you? Click here to learn more!