What is Minimum Balance to Earn Interest?

As its name already suggests, it is the minimum amount of money you need to keep or maintain in your savings account for it to earn interest.

Save for Optimum Savings, all BDO savings accounts enable you to earn a gross interest rate of 0.25% every year. This earning is spread out over a period of 12 months which means:

0.25% / 12 = 0.020833% per month

Again, in order to consistently earn interest every month, you need to make sure your balance doesn’t end up less than the minimum balance to earn interest (see the fourth column of the table below).

bdo savings account 1

As for Optimum Savings, interest rates may vary depending on how much your money is and the BDO branch where you opened the account. Account holders can expect anywhere between 0.50% to 1.25% gross interest rate per annum.

Keep in mind, however, that interests earned from BDO savings account are taxable. A 20% withholding tax is imposed in every interest you earn every month.

Therefore, if you earn Php 100 in interest this month, Php 20 (20%) will be deducted from it as withholding tax, trimming down your earnings to only Php 80 per month.

Go to the main article: How to Open a Savings Account in the Philippines