Putting loose change in coin banks has long been part of the Filipino way of saving, especially for the young ones. However, as saving methods successfully made the jump from traditional to digital, banks now offer products that not only help children track their hard-earned savings but also come with a wide range of rewards programs.
Leading bank Rizal Commercial Banking Corp. (RCBC), for example, recently launched the RCBC GoSavers program. RCBC GoSavers is a start-up savings account that helps kids and teens save money and transact easily with a debit card and/or passbook. It is also the only savings account in the market that offers free comprehensive insurance package provided by SunLife Grepa Financial for both the parents and their children.
In order to avail this insurance product, parents need to make an initial deposit or maintain a six-month average daily balance (ADB) of P10,000. Once qualified, parents get free life insurance equivalent to their six-month ADB. As an example, if their initial deposit is P10,000, their coverage is P10,000, as well. The maximum coverage is set at P250,000.
Kids, on the other hand, get free personal accident insurance which is also equivalent to their six-month ADB. Aside from these, RCBC also offers free accident medical reimbursement for kids, which is 10 percent of the personal accident coverage to a maximum of P5,000.
The whole insurance bundle automatically reduces every six months, meaning that as clients save up higher, they also get higher coverage.
The product also features a zero-maintaining balance and only requires one photo-bearing identification card, which the children’s school IDs will suffice. It comes with a customized passbook and debit card powered by MasterCard, as well. Another thing to note is the card starts to earn interest on an ADB of P10,000.
“Our goal has always been financial inclusion for all Filipinos, and part of that is educating children on how to save and manage their own finances,” said Emmanuel Valdes, senior vice president and head of deposit products and promotions division. “We want to create a savings-conscious generation where we can enable and show them how to intelligently and consistently grow their money for their own future.”
The RCBC GoSavers initiative was based on Bangko Sentral ng Pilipinas’s Banking On Your Future Program that was launched in March 2017. The program brings the banking sector fully on board BSP’s financial education program for millions of Filipino children starting from Grade I.
“At the onset, it was only participated in by 12 banks and the primary objective of this was to promote financial inclusion for students at the primary level, covering ages 0-12. In 2016 then-BSP Governor Amado Tetangco Jr. called on the Bank Marketing Association of the Philippines. We collaborated with him because he wants to revive the BOYF program and he wanted it to be sustainable. Luckily, we again had a MOA signing and there are already 17 banks participating,” added Valdes.
After the MOA signing, Valdes said that Education Secretary Leonor M. Briones challenged RCBC to “make savings sexier.” “Bakit? Dahil ’yung mga apo niya nagi-ipon, but after a while mas excited pumunta sa mall at mamili.”
For most banks, there’s only a one-year grace period for the P100 maintaining balance but after a year, banks can impose their regular maintaining balance.
He continued, “We took that challenge upon ourselves and kept it at zero-maintaining balance forever. We noticed that other banks had a lot of costumers availing their savings accounts. However, a year after, kids can no longer sustain this maintaining balance so inevitably they close their accounts.”
In a recent survey by the BSP, only 22 percent of Filipinos 15 years old and above have formal bank accounts. This connotes an unbanked segment of 77.4 percent (52.8 million Filipinos) and 60 percent of them said they don’t have enough money to open and maintain a bank account.
“This brings us to the major issue of financial inclusion, which is financial literacy. Teaching [people] the basics of budgeting, financial planning and banking, it will slowly lead them to have access to several financial services. As a bank we have to break down the entry barriers for them by making financial products affordable and easy. RCBC believes in starting them young,” concluded Dannuel Delizo, RCBC Savings Deposit product manager.