Connect with us

Business & Career

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 was written in collaboration with OCBC Business Banking. All views expressed in this article are the independent opinion of DollarsAndSense.sg based on our research. DollarsAndSense.sg is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view our full editorial policy here.

If you’re an entrepreneur building your own startup, you would have read about the stories and biographies 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 present to prospective investors willing to listen. For some, running a business may seem glamorous, with every day filled with new opportunities and exciting challenges to overcome.

However, there is one vital ingredient that you might not realise you need – a critical first step for your business to succeed – a good business bank account. Your business account may not be the sexiest topic to discuss when starting a business, but it is essential for the survival of all companies.

Read Also: Why Open A Business Account With A Bank?

Even if you’re running a sole proprietorship where you are the only shareholder of the company, a business account allows you to keep your business assets and expenses separate from your personal savings. It also helps you to track your business cashflow, which will come handy during tax season.

As a rule of thumb, you should open a business account as soon as your company starts handling money. This could be revenue that your company is earning from customers, or personal investment that you intend to inject into your start-up.

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

#1 Expected Volume Of Banking Transactions

One of the first few things to think about is the expected volume of banking transactions your business will need.

In general, if you are running a business-to-consumer (B2C) set-up, you can expect to have a much higher volume of banking transactions. These may include receiving payments from customers, paying suppliers for stocks and paying your staff.

For such businesses, the OCBC Business Growth Account is a suitable business account to use. This all-in-one business account is designed specifically for start-ups and SMEs in Singapore, and provides you with free, all-you-can-use FAST and GIRO transactions for local fund transfers.

Beyond just having a business account that allows you to safekeep your funds and pay your vendors and staff, the OCBC Business Growth Account also enables you to access necessary payment collection solutions that you may require as a business.

For example, if you are running a customer-facing business such as an F&B or retail store, you will constantly collect money from customers. As such, a digital merchant app like OCBC One Collect that is linked to PayNow for Businesses are solutions you should consider to collect payments efficiently. Your business bank account can connect you to these important payment and collection solutions.

Read Also: Guide To Payment Solutions You Need To Offer Your Customers In Singapore

#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 small starting capital, you should opt for an account that does not require you to put up a high initial deposit.

The OCBC Business Growth Account is ideal for entrepreneurs starting their own business as there is no initial deposit required for opening the account. More so, you can even open your business account instantly without any paperwork or having to go to a bank branch. Simply use your SingPass or CorpPass to apply online to create an account.

Do note that before applying for any business account, you must have registered your company with ACRA and have a business Unique Entity Number (UEN).

Read Also: Complete Guide To Understanding UEN For Singapore Businesses

#3 No Minimum Balance Or Fall Below Fees

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 in inventory. You may also need to fork out money to rent a workspace, purchase equipment and hire workers.

As such, ensuring that you don’t fall below the minimum balance required for a business account (or incur the fall below fees) can be challenging.

Look for business accounts like the OCBC Business Growth Account that do not require a minimum balance in your bank account. This will be valuable as it allows you to focus on running your business well, as opposed to having to lock your cash in the bank so that you don’t fall below the minimum balance required – and incur a fall-below fee.

#4 Additional Services That You Will Need

Opening a business account isn’t just about dollars and cents (pun intended). You should also consider the type of services and tools that come with your business account.

Common services that you can expect are business internet and mobile banking, a business debit card and e-alerts. These services provide convenience for business owners to stay up-to-date on transactions and payments received. For example, with OCBC Velocity digital business banking and OCBC Business app, you can seamlessly access and securely manage your business at your fingertips.

With an OCBC Business Debit Card, which you can receive after opening a business bank account, accounting is made easier because your card transactions are debited directly from your business account and presented in a single consolidated statement.

 #5 Let Business Banking Account Double Up As Your (Free) Accounting Software

For most entrepreneurs starting a business, there is a good chance that you (or your co-founders) will play multiple roles in running the business, including becoming the de-facto finance manager.

At the start, you may not have anyone helping you to open quotations and invoices, keep track of payments, make payroll and do general bookkeeping. You may need to design your method of bookkeeping with free software like Excel, which may take a lot of time. All this may lead to incurring greater manpower and opportunity costs in the long run.

To have a good headstart, consider opening a business bank account that comes with free in-built accounting-related solutions. For example, the OCBC Business Growth Account, gives you access to e-invoicing features for free. You can easily adopt an e-invoicing system (and connect to InvoiceNow) to create and send invoices to your clients with minimal effort.

In addition, you also enjoy free access to its Business Financial Management features that chart a summary of your existing and future cash inflow and outflow. This allows you to have a snapshot view of how your business has performed over the past year, and gives you some foresight into any cashflow challenges that may arise in the future.

You can retrieve information such as the e-invoices you have created, invoice status, automatic reconciliation and collection reminders. If you have multiple bank accounts, you can also pool the information together. All of these will ease your bookkeeping load in the initial start-up phase.

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 chore, you are not alone! We’ve been through it.

Thankfully for new business owners, you can open the OCBC Business Growth Account instantly online. Simply use your Singpass or Corppass to apply in minutes.

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.

Read Also: 5 Things You Never Knew Your Business Banking Account Can Do

 

Need Financing Support During This Period?

SMEs can enjoy extra financing support of up to $3 million through the Temporary Bridging Loan Programme when you apply online with OCBC. Terms and conditions apply.

Join The DollarsAndSense Business Community

For more content that helps entrepreneurs, freelancers, and self-employed individuals and learn to build better businesses, join the DollarsAndSense Business Community on Facebook.