What does a small business need from their bank account?
Every small business needs to go through the crucial step of choosing the right bank for their business. Thankfully, opening a bank account in Singapore is an easy process for most businesses. The difficult part is choosing between all of the banks available.
When opening a small business bank account, the important thing is to choose an account which meets the specific needs of your company. Depending on your company’s needs, you may want to look at the various different features available such as multi currency accounts, internet banking, credit cards, trade financing, and the freedom to move funds between different countries.
On top of that, almost all major banks in Singapore now offer specialized business accounts that include some great perks for small businesses or ones that are just starting out. Other things to consider is the level of convenience that each bank can provide for you. Do their internet banking features cover everything that you might want to do? Or will you have to make multiple trips to bank branches in order to get things done? It’s important to take these things into consideration so that you can avoid any financial management problems in the future as a result of choosing the wrong bank account.
In this article, we’ll take a look at some of the top banks in Singapore and see how their bank account offerings for small businesses stack up against each other.
DBS’s Digital Business account is part of a new generation of bank accounts that eliminates manual transactions. It’s a great option for new businesses, with no minimum balance and no fall below fees. This makes it Ideal for start-ups with low minimum balances that require a service which allows them to mostly transact online.
DBS IDEAL is the online banking platform for DBS account holders, and has a great feature known as the DBS IDEAL digital token. The digital token allows you to gain easy access to your account for important transactions on the go, without the need to carry around a physical token to validate your logins and transactions. This is great for startup owners who have to be constantly on the go and need the ability flexibility to be able to conduct transactions while out handling other aspects of their business. This also makes it much easier to keep an eye on the cash flow of your business.
Keep in mind that the DBS digital account does have a monthly fee of $18 a month. This might influence your decision when considering to set up an account with DBS. Especially considering that there are other banks which have business accounts which do not charge a monthly fee.
Another thing to consider is the ease when it comes to opening a new account with DBS. You can apply for a DBS digital account through a convenient, online process which DBS claims can be done within 5 minutes. Although this will depend on the structure of your business.
OCBC’s offering for startups and small businesses is the business growth account. This one is great for new businesses as it has a very low initial deposit of only $500. Also, there is no minimum balance requirement for the 1st 6 months. Although it’s important to note that after that period, you’ll have to maintain a minimum balance of $3000 in order to avoid the fall-below fee.
The Business Growth account can also be incredibly easy to set up if you already have a personal bank account with OCBC. 1 day account opening is possible through OCBC’s online application service with no meet up required. Although it’s important to note that this is only applicable to Singapore-registered Sole Proprietorships owned by an individual. Or Singapore-incorporated private limited companies with a sole shareholder, who is also the sole director.
OCBC’s banking app is known as OCBC Velocity, and has a reputation for having one of the better user interfaces among all of the other banking apps available. As with any good banking app, OCBC Velocity allows you to perform a variety of functions to help you stay on top of your business finances.
Despite the low requirements for setting up an OCBC business growth account, it’s important to note that it does have an annual account fee of $38 a year. Furthermore, after your account has been open for more than 6 months, you’ll have to pay a fall below fee of $35 if your account dips below the minimum balance of $3000. You may want to keep this in mind when considering the OCBS business growth account among other small business bank accounts such as the Maybank Flexibiz account.
UOB’s ideal small business bank account is the ebusiness account.
The ebusiness account offers some great conveniences for small business owners in the form of their Business Internet Banking Plus platform aka BIBPlus. This take on internet banking allows you to conveniently perform business transactions while also giving you an extended cut-off time for Telegraphic Transfer, Payroll and GIRO transfers.
The ebusiness account has a relatively standard initial deposit requirement of $1000, but it does also have a $15 fall-below fee if your account fails to meet the average daily minimum balance of $5000. Having said that, there is no monthly fee for the ebusiness account.
You can book an appointment online to avoid queueing at a bank branch when you want to set up your account. Though you can’t carry out the entire account opening process online the same way some other banks allow.
Finally another thing to note is that UOB actually has relatively expensive transaction fees, with over the counter cash deposit/withdrawal costing $20 per transaction.
Maybank offers a number of different corporate banking accounts. The one that might be of the most interest to small business owners is the flexibiz account. This account only requires a $1000 initial deposit, and has no minimum balance required to maintain your account. This makes it a great choice for young businesses that may face problems with their cash flow. You won’t be hit with any fees or charges for failing to meet a minimum balance as there is no monthly fall below fee.
Besides being good for cash strapped businesses, Maybank also offers a number of business e-services.
Maybank’s PayNow Corporate feature allows you to instantly receive payments from businesses and individuals without the need to retrieve or disclose account numbers. All you need to do is provide your Unique Entity Number or oa PayNow QR code. You can also make payments to other businesses using the service, or even to individuals using their NRIC or mobile number, a very handy feature for making payments.
Maybank also has a Business Internet Banking (BIB) service that allows you to conveniently manage the financial aspects of your business. You can easily pay your staff and collect funds from clients. FAST also provides one of the lowest transfer fees around for immediate local fund transfers.
Another nice feature of BIB is the ability to perform same business day fund transfers to Maybank Malaysia. This could come in particularly handy if your business has operations in Malaysia.
Maybank also provides the typical features for international payments and transfers such as international fund transfers via Telegraphic Transfer or multi-currency fund transfers between your own Maybank accounts.
There are alot of factors to consider when it comes to choosing the right bank account for your small business.
There’s a large range of reputable banks in Singapore, and each of these banks offers a range of personal and corporate products which can make it difficult for a business to identify which account is truly right for them.
In this article, we’ve identified a few possible offerings from Singaporean banks which are designed with small businesses and startups in mind. Since these are business accounts attached to large well-known banks, virtually all of them will offer the essential functionality that a small business will require from a bank account, such as the ability to perform payments to clients and staff and to manage your finances on the go.
As such, the key difference that will help you decide which bank account to choose as a small business might be the monetary requirements of each account. Maybank offers the most flexibility and lowest fees for startups while also having a great deal of business functionality, but it doesn’t have the same presence and reputation in Singapore as DBS, OCBC and UOB. These banks may have higher fees attached to their small business bank accounts, but this is usually a trade off for premium conveniences such as more ATM’s and branch locations, or excellent and advanced online banking apps such as OCBC Velocity or DBS IDEAL.
This could make it more worthwhile for your company to open an account with one of these banks if your cash flow is healthy enough to avoid incurring extra fees.
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