Mom's Ipon Challenge 2021: The Digital Way | How to Save Money and Earn Interest From It

Digital Way of Ipon Challenge 2021 

Ipon challenge is a trending topic at the start of the New Year. I see a lot of posts on how to be successful in doing the challenge, how much to save in an ipon challenge, how effective the ipon challenge is. For me, it is alright to save money for emergencies. However, I see the ipon challenge as a challenge to save money that we can afford to forget and not use for at least a year. So, why not maximize the benefit of saving money?

Given the COVID-19 pandemic, there are a lot of banks and mobile apps that allow you to easily handle your flow of money. You can quickly order and buy online, pay bills, and transfer money from one bank account to another. Most transactions are about money flowing out. If you will look closely, you can save more online by keeping your money in your bank account and investing it. If you can save more than Php 60,000 per year for the ipon challenge, then imagine the earning if you will put your cash in a trust fund or to a good and reputable bank.

Can you put your ipon in GSave?

Trading, mutual funds, and trust funds may sound complicated for you. If you are a regular GCash user, then you may be familiar with GSave and it is very easy to place your savings here. A GSave account is available for all GCash App users. In your GCash app, you just need to click the "Save Money" icon to view your account balance and transactions. It is easy to navigate between GCash and GSave. Also, there are no annual fees for this savings account. 

If you are using GSave, you will be encouraged to use the CIMB Bank PH app to upgrade and enjoy the benefits of the GSave account. I will discuss this in another post. 

Now, if you will put your ipon in your GSave account, your money is saved and is earning interest. With a 3.1% annual interest rate, this is not bad at all!

If you want to know how more convincing it is to save money in a bank account with good interest rates you can simply use this formula:

Net Interest Earned = [Average Daily Balance x No. of days in a month / 360] x Interest Rate P.A. x [1 - Withholding tax (20%)

Sample Computation if you can save Php 2000 every first day of the month to a bank with a 3% interest rate per annum. You earn around Php 317 interest.

I'm not that good at computation so my example posted above might have some flaws. Anyway, just consider the fact that your money is more than what you actually saved for a year. You don't need to worry about withdrawal since it can easily be transferred from your GSave account to your GCash account without extra charge. Withdrawing from GCash is also easy especially if your account is verified.

Now, just imagine how much you can make if you will do the famous 52-week money challenge by putting it in a bank. If you will start saving Php 50.00 and increment the saving by 50 every week, then you can save about Php 68,900 at the end of the year. If you save it in a bank that offers a good rate of at least 3% per year, then you will have more than Php 68900.  Any accountant who can compute the total amount? 😅

I wonder what you will do at the end of the year with your saved money... but you might be tempted to invest it again as you see your money growing. That's how I start getting interested in different investment products. 

The Cons of Digital Banking 

I can see the downside here is that your money is not readily available in case you need it for an emergency but I assume if you are doing this challenge then you already have your emergency funds set aside. If you worry that the bank will go bankrupt and you will lose your money, remember that your deposits are insured up to Php 500,000.  Again, I set GSave as an example because it is under a trusted company, Globe Telecom. On the other hand, CIMB Bank PH is known already as a multi-awarded digital bank.

If you worry about your money getting stolen online, then you must take all the precautions and safeguards to protect your online account. Exert the same effort when you secure and place extra protection for your money jar and passbook. Whatever way you choose to save your money, be very careful especially in trusting people. 

So, what do you think? Is the Ipon Challenge using a digital bank convincing this year?