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Guide To Opening A Business Account For Your Start-Up In Singapore

A personal savings account helps you safeguard your personal cash. A business account helps you to safeguard the funds for your start-up.


This article is written in collaboration with OCBC Business Banking. Views expressed in the article is the independent opinion of DollarsAndSense.sg.

If you’re an entrepreneur working on your own start-up, you would have read about the stories of business giants like Elon Musk, Richard Branson, Jack Ma and Phil Knight. You may even have a carefully-crafted elevator pitch on standby, ready to be presented to any prospective investors willing to listen.

However, there is one vital ingredient that you might not realise you need but is nonetheless a critical first step for your business success – a good business bank account. Business accounts may not be the sexiest thing to discuss when starting a business, but they are essential for businesses.

Even if you’re running a sole proprietorship (i.e. you are running your own business), a business account allows you to keep your business assets and expenses separate from your own personal savings. It also helps you track your business cash inflows and outflows, which will come in handy during tax season.

As a rule of thumb, you should open a business account as soon your company starts handling money. This could be revenue that your company is earning from its customers, or personal cash and investment that you intend to put in.

Depending on the kind of business you are running, the type of banking services that your company needs could differ significantly from other companies. Here are some factors you should consider when choosing a business account.

# 1 (Expected) Volume Of Banking Transactions

While there are many types of business account available in the market, they can be generalised into two main groups, accounts meant for businesses with low volume banking transactions and accounts meant for businesses with high volume banking transactions.

If you are running a consultancy-based business, the amount of banking transactions you make each month could be quite low, since you may only be limited to payment of salaries to staff and vendors.

For these businesses, an account like the OCBC Business Growth Account will be appropriate. With a fee of just $38 per year, you can ensure that all your business’s banking needs are taken care of, without having to pay more than you need to.

Source: OCBC

However, it is a completely different story if you are starting your own e-commerce business. Such businesses will require a large volume of banking transactions each month in order for you to pay your suppliers, your employees and even the occasional refunds to your customers.

If your business has these needs, you may want to choose an account that will provide you with a large allotment of banking transactions.

An example of such an account will be the OCBC’s Business Entrepreneur Account, which provides free transactions of up to 200 GIRO transactions, 20 FAST payment transfers, two outward telegraphic transfers and 30 cheque payments each month. All these transactions are worth up to $288 each month. However, you only pay $38 per month (first three months waived) for this account.

Source: OCBC

# 2 Initial Capital Outlay

Most banks will require you to make an initial deposit to open a business account. This can range from $500 to $30,000.

If your business has a low starting capital, you should opt for an account that does not require you to put up a high initial deposit.

For example, the OCBC Business Growth Account requires a low initial deposit of just $500, which is the lowest among banks in Singapore. This makes it useful if you need to set up your business account first, while you wait for additional funds to be transferred to your company from other business partners.

# 3 Waiver Of Minimum Account Balance During The Initial Months

For many entrepreneurs, the initial stage of setting up a business can be capital intensive. If you are running an e-commerce business, you may find a large portion of your capital being locked up, as you would need to pay for goods in advance, before being able to sell them to your customers. You may also need to fork out money to secure a working space, purchase equipment and hire workers.

Look for business accounts that can waive off your minimum balance requirements during the initial months. This would reduce the cost of maintaining your business account at the start, where your capital may be tied up in other important areas.

Both the OCBC Business Growth Account and the OCBC Business Entrepreneur Account requires no minimum monthly balance for the first six months after account opening. You can apply for your business account online, get your approval instantly and start using your account to pay and receive funds – without having to worry about maintaining a monthly balance in the initial months.

# 4 Average Minimum Monthly Balance

Similar to personal banking accounts, most business account will require you to maintain a minimum average monthly balance, failing which, a monthly service fee may apply.

As an entrepreneur, you want to minimise unnecessary cost. One easy way of doing so is to choose a business account with a minimum monthly average balance that your business can comfortably maintain.

The OCBC Business Growth account have a minimum balance requirement of $3,000 while the OCBC Business Entrepreneur Account has a balance requirement of $5,000 – both of which are reasonably low amount for any businesses to maintain as an account balance.

# 5 Services That You Will Need

Opening a business account isn’t just about dollars and cents (pun not intended). You should also look at the type of services that the business account can offer.

Common services that you can expect include business internet banking, business mobile banking, a business debit card and e-alerts. These services provide convenience for business owners who need to stay up-to-date on transactions and payments received by their business.

In addition, you may also want to opt for a bank that has a large network of bank branches and ATMs. This makes it more convenient in the event you need to withdraw petty cash from the ATM, or need to visit a bank branch to seek corporate banking related advice.

Beyond just banking services, OCBC is also able to support you in other key areas of your business growth. One way is through its innovative digital business dashboard, which helps business owners monitor different aspects of their business. All OCBC business banking customers enjoy this service for free.

Read Also: 3 Ways The Digital Business Dashboard By OCBC Has Helped Us Manage Our Business

Enjoy (24/7) Instant Online Account Opening With OCBC

If you feel that heading down physically to a bank branch to open a business account is a hassle, you are not alone! We’ve been through it.

Thankfully for new business owners, both the OCBC Business Growth Account and the OCBC Business Entrepreneur Account can be opened instantly online. Both existing and non-OCBC customers can get their business account application done in less than 10 minutes using MyInfo. For those without MyInfo, they can also apply online through their personal banking credentials.

Once the application is successfully completed online, you will get your business account number – on the spot. This allows you to start using the account immediately for business transactions.

There is no further need to wait a few days for an email, a letter or even for someone to call you back to get your account details. This makes it the easiest, fastest and most convenient way for you to get a business account for your start-up.

Supporting Your Business Beyond Just Banking

OCBC also works closely with industry partners to bring solutions to SME owners. For example, it offers digital package across HR, Accounting, Digital Marketing, Digital Transactions and Cyber Security for its business banking customers as part of the SME Go Digital initiative.

Another example is the partnership it has with Xero, a popular cloud-based accounting software platform for SMEs. OCBC business banking customers can connect Xero to their OCBC Business Account, giving them automatic daily insights to their business cashflow.

By choosing a suitable bank and account for your business, you can start your business on the right foot, significantly reducing future banking-related headaches, and allowing you to focus on growing your business, building your products and services, and serving your customers well.

Now that you understand how to choose the most appropriate business account for your start-up, you might want to take a look at the range of business accounts from OCBC that serves companies of all sizes, from start-ups to large corporations. You can find out more about the different accounts, and the benefits you get from each of these accounts, before selecting the one that best suits your business needs.

Online Exclusive: From now till 30 April 2019, enjoy 1st year fee waiver when you open the OCBC Business Growth Account online.