Should You Keep Everything in One Bank or Spread to Multiple Accounts in Different Banks?

When managing finances, many Filipinos wonder whether it’s better to consolidate funds in one bank or distribute them across multiple institutions. While keeping everything in one place may seem convenient, diversifying your accounts offers distinct advantages—particularly when it comes to risk management and maximizing your earnings.

Understanding Your Guaranteed PDIC Insurance

A key consideration is the Philippine Deposit Insurance Corporation (PDIC), which insures deposits up to Php500,000.00 per depositor, per bank.

This means that if your bank goes bankrupt, only this amount is guaranteed to be refunded. By spreading your assets across multiple banks, you can ensure that a larger portion of your savings remains insured, reducing the risk of losing money in unforeseen circumstances.

We don’t hear much of Philippine banks going bankrupt. If they do, however, and you have a significant amount you need to withdraw before all hell breaks loose, then you’re in for a hard time. You wouldn’t be the only client that will make a beeline for the nearest branch to withdraw their money, so you’re already looking at a very long line at the teller.

There’s no telling that by the time you’re up, there’s still cash to be withdrawn. Save yourself the hassle. Divfersify your assets.

Pag-IBIG MP2 (Modified Pag-IBIG 2) Savings

Diversifying your accounts isn’t just about safety, as it can also be used to maximize your financial growth opportunities. The Modified Pag-IBIG II (MP2) Savings program offers competitive dividends and is a secure option for medium-term investments. It’s an ideal choice for those looking to grow their funds while supporting a government-backed program.

“The Modified Pag-IBIG II (Pag-IBIG MP2) Savings Program is a special voluntary savings facility with a 5-year maturity, designed for active Pag-IBIG Fund members who wish to save more and earn higher dividends, in addition to their Pag-IBIG Regular Savings,” the Pag-IBIG MP2 website says.

By allocating a portion of your savings to MP2, you can achieve higher returns compared to traditional savings accounts.

The only catch here is you’ll need to wait it out for five whole years or get pieces of the pie annually before you get to hold that money again Should you opt to prematurely withdraw your money, you may also do so if you have a valid reason.

Digital Banks and Their Higher Interest Rates

Additionally, digital banks in the Philippines often provide higher interest rates, sometimes exceeding 4% per annum. Placing small amounts in these banks not only allows you to take advantage of these competitive rates but also gives you the flexibility to manage funds conveniently through mobile platforms. Spreading your assets to these banks can significantly boost your passive income over time.

Digital Banks make for the perfect platforms to spread out and park your money for the short term.

While consolidating accounts might simplify financial tracking, diversifying your funds across multiple banks provides a safety net and unlocks opportunities to earn more. It’s a very balanced approach that ensures security, growth, and flexibility in managing your finances.

Spreading your assets across various financial platforms and institutions is a smart strategy for mitigating risks while making the most of available financial tools. (GFB)