Digital banks in the Philippines can provide some of the most convenient and safe ways to save in the Philippines while providing the highest available interest rates in the country. It can be a tool for ordinary Filipinos to gain financial freedom.

What is a Digital Bank?

A digital bank is primarily a bank that has no physical branches and provides most of its services online usually through a smartphone app. While digital banks don’t offer the same visibility of traditional banks, they are still regulated by the BSP and insured by the PDIC, which makes them a great option for anyone looking to save from the convenience of their own home.

Why use Digital Banks?

High Interest Rates. Since digital banks have the lower expenses (they don’t have any physical branches) much of their revenue actually gets passed back to customers as interest rates. This is why: compared to traditional banks, digital banks have much higher interest rates. Keep in mind though, that all interest is subject to a 20% withholding tax.

Safety. All digital banks in the Philippines are regulated by the BSP (Bangko Sentral ng Pilipinas) and are insured by the PDIC. As long as you don’t go to a scam, you can be assured that the bank will treat your money appropriately. Keep in mind as well that you’re guaranteed up to PHP1,000,000 even if a bank goes bankrupt.

Convenience. On top of all of that, digital banks mostly exist on smartphones, which means that you can access all your funds from anywhere at any time, which can be helpful if you like spending or simply want to be more aware of your current financial status. You can also access your money at any time compared to PAG-IBIG MP2, which locks up your money for 5 years at a time.

Best for Overall Use: Maya

Maya was actually an e-wallet, before known as PayMaya, but became part of the group of digital banks in the Philippines later on. Maya offers a variety of services such as quick personal loans, access to investment funds, and bills payment.

Interest Rates: 3.5% per year(effective rate after tax: 2.8% per year)

Maintaining Balance to Earn Interest: PHP0

Key Benefits / Advantages:

1. PesoNET Free Bank Transfer Option – Offers access to PesoNET which allows for free bank transfers (though, it’s not instant). Keep in mind that InstaPay is still available, it’s just nice to have the free option.
2. Similar to GCash – Offers access to bills payment, load, etc.
3. Time Deposit Available – Offers higher interest rates (5%-6% per year, subject to 20% tax) in exchange for a lock-up.
4. Landers Cashback Credit Card – If eligible, users of Maya can avail of a credit card that pays out 1% cashback everywhere, 2% on dining, and 5% on Landers purchases.

Overall, Maya is a good digital bank for people who need their digital banks to do a variety of things. Maya can help you pay for day-to-day items (using your credit card), but also help you save in the long-term (using its time deposit features).

Best for Shopping: GoTyme

GoTyme is the Gokongwei’s (primary owner of Robinson’s) and Tyme’s (multi-country bank) entry into the digital banks in the Philippines. While GoTyme doesn’t offer the same versatility as Maya, it does offer some unique features that aren’t found in any other accounts.

Interest Rates: 3.5% per year(effective rate after tax: 2.8% per year)

Maintaining Balance to Earn Interest: PHP0

Key Benefits / Advantages:

1. USD Time Deposits – GoTyme allows you to buy USD and save it at a certain rate all through the app without going through any other external service.
2. Go Rewards (Cashback) – GoTyme gives a small cashback for every single purchase when you use their debit card and gives 3x more rewards when shopping at Gokongwei-owned brands such as Southstar Drug & Robinson’s.
3. PHP4 Average Bank Transfer Fee – GoTyme’s bank transfer only costs PHP8 and every 2nd bank transfer (or the transfer after the 1st) is completely free. This means that every bank transfer only costs around PHP4 overall.

Overall, GoTyme is a solid bank for anyone looking to spend and save. it has also been recognized for its exceptional user design (and as a user, I can testify it is really good). While GoTyme is catered towards spending and transferring money, it also gives the tools to save effectively through its USD Time Deposit and traditional savings account.

Best for Saving: Tonik

Tonik is actually the first of all the digital banks in the Philippines. It was one of the more prominent digital banks in the early days of this new industry. While it is less prominent now, there’s no doubt that Tonik is still a useful digital bank for savers.

Interest Rates: 4% per year (effective rate after tax: 3.2%) (on Solo Stashes).

Maintaining Balance to Earn Interest: PHP0

Key Benefits / Advantages:

1. Group Save Feature – Tonik allows you to save with other people and gives you an extra 0.5% interest rate along with it. Bringing your total up to 4.5%. Keep in mind though that you need 3 total people to activate the feature.
2. Time Deposit – While other digital banks do have time deposits, Tonik’s time deposits are actually quite generous. Firstly, they give you 6% per year (effective rate after tax: 4.8%). Secondly, they don’t charge you if you need to withdraw it within 5 days.
3. Access to Loans (if you need it) – On top of that, Tonik offers first-time savers the opportunity to build their credit score through their credit builder loans.

Overall, Tonik is a great bank for those looking to save. It doesn’t have the same temptations of other apps to spend your money and encourages you to lock it away as much as possible, which makes it the perfect digital bank for savings.

Best for Starter Life Insurance: UnoBank

UnoBank is one of the digital banks in the Philippines that’s integrated with GCash and has a higher interest rate than the other bank: CIMB.

Interest Rates: 3.25% per year (below 5K), 3.75% (above 5K); (effective rate after tax: 2.6% (below 5K), 3% (above 5K)).

Maintaining Balance to Earn Interest: PHP0

Key Benefits / Advantages:

1. Free Life Insurance Coverage – Get free life insurance coverage up toPHP 50,000 when average daily balance stays above PHP10,000
2. PesoNET Free Bank Transfer Option – Offers access to PesoNET which allows for free bank transfers (though, it’s not instant). Similar to Maya.
3. Time Deposit Available – Offers higher interest rates (5%-5.25% per year, subject to 20% tax) in exchange for a lock-up.

Overall, Uno Bank is a good bank if you’re looking for some life insurance, but don’t have the high savings to back it up.

Best for Life Insurance Overall: CIMB

CIMB is also one of the digital banks in the Philippines integrated with GCash, but despite having the lowest interest rates in our list, they still boast some important features which may attract some people.

Interest Rates: 2.5% per year (for Upsave accounts), 2.6% (for GSave accounts); (effective rate after tax: 2% (for Upsave accounts), 2.08% (for GSave accounts).

Maintaining Balance to Earn Interest: PHP0

Key Benefits / Advantages:

1. Free Life Insurance Coverage – Get free life insurance coverage up to PHP 250,000 (matching your average daily balance) when average daily balance stays above PHP5,000. For example, if you’re average daily balance is PHP100,000, you get PHP100,000 in coverage too!
2. Free InstaPay Transfer Fees – Unlike other digital banks, CIMB actually covers your InstaPay fees up to 5 transfers daily. They also have the PesoNET option!
3. Maxsave Time Deposit Available – Offers higher interest rates (5.5% per year, subject to 20% tax) in exchange for a lock-up period.

Overall, CIMB is a pretty solid bank for people looking for insurance and want the free bank transfers. This is especially useful for breadwinners who have dependents and need to transfer funds regularly to family members.

Best Alternative “E-Wallet”: SeaBank

While technically not classified as a digital bank (SeaBank is actually a rural bank), it does offer digital bank-like features that makes it a solid choice among the digital banks in the Philippines. Affiliated with Shopee, Seabank offers promos and integrations with the e-commerce platform.

Interest Rates: 4% per year (for up to 300k), 3% (in excess of 300k); (effective rate after tax: 3% (for up to 300k), 2.4% (in excess of 300k).

Maintaining Balance to Earn Interest: PHP0

1. 15x Free Bank Transfers Every Week – Seabank gives 15 free transfers to any bank every week, which makes it perfect for people who need to transfer.
2. Up to PHP1000 Cashback on Debit Card – Much like GoTyme, you also receive some cashback on every purchase. Some users report that cashback is 1% on all purchases — though, it’s not confirmed on their official website.
3. Buy Load Available – You can also buy load on SeaBank, which makes it similar to e-wallets.

Overall, SeaBank is actually a solid alternative for e-wallets despite being one of the digital banks in the Philippines. Its free transfers, cashback, and load makes it a perfect choice if you both want to save and use your money regularly.

Honorable Mention: Union Digital Bank

UnionDigital Bank joined the roster of digital banks in the Philippines as a subsidiary of UnionBank.

Interest Rates: 3.0% per year (below 5M), 3.75% (above 5M); (effective rate after tax: 2.4% (below 5M), 3% (above 5M)).

Maintaining Balance to Earn Interest: PHP0

Unfortunately, UnionDigital Bank doesn’t have any specialized role among the digital banks in the Philippines. Unlike other banking institutions, I could not find any advantage that UnionDigital has over other digital banks in the Philippines. While they do have access to loans, credit and time deposits, other digital banks in the Philippines also have these features.

Conclusion

Overall, choosing which among the digital banks in the Philippines to use is not that difficult. However, they have different purposes and different roles depending on what stage of your life you’re currently in. At the end of the day, the goal of using a digital bank is to maximize our hard-earned savings!