[Finterest] Want kids to save early? Here’s what BPI’s ‘Lolo’ TG Limcaoco has to say

MANILA, Philippines – A child’s first savings account will not make them rich overnight.

At current bank rates, even a few thousand pesos will earn only a modest amount of interest. But that’s not really the point.

“It really is about building habits from the start,” BPI president and chief executive officer TG Limcaoco told Rappler at the sidelines of the launch of their child-oriented savings account. “The concept of every time you get money, set aside something before you spend it is a great habit.

For the top leader of the 175-year-old bank, the advice comes not just from a banker, but from a proud grandfather too – or from “Lolo TG,” as he was introduced to the kids at the event.

Set a goal to save for

In an interview with Rappler, Limcaoco said saving becomes easier for children to understand when they have both a clear goal and a formal structure to keep their money. Instead of simply telling them not to spend, parents can help them work out how much they need to save and how long it may take to reach that goal.

Saving for the future sounds painfully abstract to an eight-year-old where a day feels like forever. Saving for a bicycle, a new pair of shoes, a gadget, or even a dog is easier to understand.

Learning to set money aside can also help a child start to distinguish between needs and wants.

“When they’re young, they have to learn the importance of budgeting, of saving, of really thinking how hard it is to make your money grow over time,” BPI consumer banking head Ginbee Go told Rappler.

Go suggested connecting money to simple household tasks. A child who earns a small amount from completing chores begins to understand that “money is earned” and does not simply appear whenever they ask for something.

BPI’s Disney-themed Jumpstart account is designed for children ages 7 to 17 and includes a web app to learn basic saving habits. Once the child turns 18, the training wheels can come off and the money can move into a regular adult savings account. Other banks offer similar starter accounts too: BDO has Junior Savers, Metrobank offers the Fun Savers Club, UnionBank has First Savings, RCBC has GoSavers, Security Bank offers Junior One, and EastWest has Kiddie Savings.

Everything starts with savings

“Maybe a kid puts P100 a month. To me, the encouraging thing is when the kid begins to see that it can grow, not only because of their work, but when the interest gets credited – the magic of interest, even though it’s small, really is meaningful,” Limcaoco told Rappler on Saturday, August 1.

This is even more important given that the Philippines is a highly consumption-driven economy. Household savings remain thin. According to the World Bank found that just 23.9% of Filipino adults saved through a formal account in 2024, well below the 58.9% average across East Asia and the Pacific. Even when there’s money left over, it often stays outside the formal banking system. In the BSP’s 2025 Consumer Finance and Inclusion Survey, 44% of Filipino adults said they kept surplus money in a piggy bank or vault, while only 17% said they deposited or saved it in a bank.

“If we want to build a stronger and more resilient economy, we must cultivate the habit of saving early,” Go said. “We must teach our children not only how to dream, but how to prepare for those dreams.”

A savings account is also just the start. Once children are older and understand the importance of keeping money for emergencies and near-term goals, parents can begin introducing longer-term investments such as index funds. (READ: [Finterest] The winners of the best investment funds in 2025 are…)

An index fund spreads money across a basket of companies instead of betting on a single stock. It often tracks the value of a stock market index, such as the Philippine Stock Exchange index. Its value can still rise and fall, so it is better suited for money that will not be needed for several years. But young investors have time on their side.

The earlier money is invested, the longer it has to potentially grow and compound. Some Philippine index funds also allow people to begin with relatively small amounts, such as a P1,000 minimum investment. – Rappler.com