In our country, online banking has became prevalent and even surpassed the popularity of traditional banks. Why? There are two main reasons I can think about.
1. Higher interest yield
A normal savings account of an online banking would yield from 2-5% interest income annually. This of course is gross of 20% withholding tax. Compared to traditional banks which only give interest of about 0.025%.
Personally, fifty percent of my income is in these online banks, while the other half is in crypto and stocks. There are moment that fear would creep in because what if something happens to my phone or my accounts get hacked, my little savings will be gone as well. But as they say, rewards come with risks.
My only disappointment is that online banks are now the norm and interest rates are fluctuating downward. I received my interest for the month of March 2025 today and despite having a higher cash balance for March than February, I still yield lower interest because the rate changed from 5% to 3.5%.
2. The convenience of online banking
I grow up witnessing my parents go to banks every weekdays to deposit and withdraw money. We do have a business in finance so going to the banks became part of our daily routine. Watching many people coming in and out of bank establishments, I can just imagine the hassle it has been for my parents. Although I barely notice them complaining.
Now that I'm an adult, I find convenience in online banks and I rarely go to physical banks.
On the other hand, some people find safety in traditional banks because when the system gives errors, they can always seek assistance from the cashier or bank manager.
I noticed that it's the millennials older generations who still believes in traditional banks. Probably because it's what they've accustomed to and it's very difficult to change our belief system.
How much interest rate does your bank give you? I'd be happy to hear about them in the comment section below.
That's it for today's blog. See you in my next one!
Sending some love and light
Love, Lizzy