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The Pros and Cons of Using a Savings Account as an Overseas Filipino Worker (OFW)

The Pros and Cons of Using a Savings Account as an Overseas Filipino Worker (OFW)

23 Oct 2023

Overseas Filipino Workers are stationed in many places of the world. According to research, 41.3% of OFW respondents were stationed in the UAE, 20% in East Asia, 9.3% were seafarers, 8% in Southeast Asia and Europe, and 4% in Oceania and the United States.


Thousands of Filipino expats contribute to their hometowns by doing money transfer to Philippines to their families. However, striking a balance between caring for loved ones at home, maintaining a decent quality of life, and saving for the future can be difficult. Remittances for families living overseas can be an economic lifeline in many situations, but sending money can make it difficult for workers to save.


It is possible to send money home while also saving money. Many international Filipino employees wish to own or construct a home in the Philippines. This may appear to be a lofty goal, yet it is one that many people can achieve. Some OFWs choose to open bank accounts. This article will discuss the benefits and drawbacks of saving accounts for Filipino employees.

What is a Savings Account?

A savings account is a financial product that allows you to deposit funds and receive a little interest. These accounts are federally insured for up to $250,000 per account owner and provide a secure location for your money to grow while collecting interest. You don't need much money to start a savings account, and you'll have fast access to your money, but you may be limited in how many times you use it each month. 

Usage of a Savings Account

When it comes to saving money, a savings account is typically an excellent place to start. It's secure and a fantastic location to start saving for emergencies. If you believe a savings account is perfect, browse to find the best one for your needs. Look for savings accounts with low fees, a high interest rate, a low minimum amount, and excellent customer service. 


Also, Read 6 ways to better manage your finances as an Overseas Filipino Worker.

Pros of Savings Account

The following are the advantages of having a savings account. 

Readily Available 

It is a readily available asset. Savings accounts deal in cash, so you don't have to sell stocks or make other difficult movements to get your money.

Earn Interest 

Interest is earned on savings accounts. Even though interest rates have been meager since 2007, a savings account will still earn interest over time. Rates vary by bank, but the national average is at 0.09 percent, with high-yield interest rates reaching 2.05%.

Cheap Investment Rates 

Many savings accounts are available for as low as $25. Some financial organizations allow you to open an account for as little as $1, allowing you to start saving a small sum.

Accessibility and Availability

Savings accounts, unlike long-term investment accounts, are simple to open and allow you to withdraw and deposit funds at ATMs or through 24-hour online access at any time. Many financial institutions will let you link your savings account to another account, such as a checking account, to prevent costly overdraft fees. This also enables you to move funds from one account to another quickly. By linking a checking account to a savings account, Filipino workers can even make money transfer to Philippines

Automatic Bill Payments 

Many banking institutions allow invoices to be paid automatically from a savings account without being subject to withdrawal and transfer laws, saving you money on late fees and missing payments.

No Lock-in Period 

There is no lock-in period. You're not locked in for a set amount of time, so you can switch savings accounts whenever you like.


Cons of Savings Account

The major cons of savings accounts are mentioned below:

Requirements for a Minimum Balance 

Most savings accounts have a minimum balance requirement or a monthly maintenance fee. If your savings account falls below the required minimum level, the bank will withdraw penalties from your account, erasing the interest you received.

Low-Interest Rates 

Interest rates are low. Interest rates are lower when compared to other forms of accounts or investments, such as money market accounts.

Withdrawal Limits

Withdrawal Limits in the United States. Savings accounts have federal withdrawal limits of six times per month. If you withdraw more than six times a month, the banks will charge you a fee or shift your account from savings to a checking account. This is a main disadvantage as people can need the money more than six times a month. 


This is included in the advantages, but it can be lethal at times. If you discover that it is easy to access money, it may make long-term saving difficult. It can even be dangerous for workers who need to send money to Philippines to feed their families and provide necessities. 

Change of Rates 

Rates are subject to change. Savings account interest rates are variable so financial institutions can establish and adjust interest rates at their discretion. Rates on high-interest savings accounts will mostly follow the swings of the federal rate.

Interest on Interest

Most traditional banks usually compound the interest on your savings account monthly or annually. This implies that your money's full potential isn't always realized, especially when compared to alternative investment options.


ACE Money Transfer is well-known for its lightning-fast transactions. It comes to the rescue in times of need. As a Filipino expat working abroad, you may be unable to personally assist your family in times of crisis, as your cash will be transferred across borders within a day. There are no hidden fees. The only fees are transfer fees, which are lower than those banks charge. As a result, ACE is a good solution for anyone looking to save money. 



Overseas Filipino Workers (OFW) send money to Philippines to support their families. They also need to save money, for which some workers open savings accounts. A savings account has various advantages, including introductory interest rates, savings strategies, and internet access. Before applying for a product, consider the various methods you might use to build your savings. But it contains some demerits as well. It is wise to know the whole situation before opening a savings account. 



1: What are the advantages of using a savings account as an OFW?

Answer: Savings accounts offer a secure place to store your money, the potential to earn interest, easy access to funds, and can help you build a financial safety net for your future.

2: What types of savings accounts are available to OFWs, and how do they differ?

Answer: OFWs can typically choose from regular savings accounts, high-yield savings accounts, or special OFW savings accounts. High-yield accounts often offer higher interest rates but may have more restrictions.

3: Are there any disadvantages to using a savings account as an OFW?

Answer: The main disadvantages of savings accounts include relatively low-interest rates, limited investment potential, and the risk of inflation eroding the purchasing power of your money over time.

4: How can OFWs maximize the benefits of a savings account?

Answer: OFWs can maximize savings account benefits by consistently saving a portion of their income, setting specific savings goals, and comparing different accounts to find one with the best interest rates and terms.

5: What are the tax implications and potential fees associated with savings accounts for OFWs?

Answer: The tax implications and fees can vary depending on your home country and the specific savings account. Some countries tax interest income, while others may not. Be aware of any account maintenance fees or withdrawal charges, and choose an account that minimizes these costs.

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