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As a new business owner, you may have blindsides in running a successful start-up. A major one is that you are now responsible for all facets of the business rather than just being a good operator or managing one part of a company.
Getting a business account is usually one of the first things you do because you will use your account to collect revenue, pay employees and suppliers and for legal and accounting purposes.
There are various business accounts offered by banks. While a good business account is essential, you don’t want to incur unnecessary expenses on it, especially since this will be a recurring cost for your business. With all things being equal, aim to keep any fees and charges to a minimum as far as possible.
In general, you should look at:
- Minimum initial deposit – how much money you have to deposit into the account to be able to open your business bank account
- Fall below fee – how much money you need to maintain within your business banking account each month to avoid a fall below fee (and how much this fall below fee is)
- Monthly service fee – a monthly fee to keep your business bank account running
- Transaction fees – how much you need to pay for local and overseas transfers
- Other types of fees – such as early closure fees and overdraft charges
You may have the preconceived notion that a business account typically requires a large initial deposit. However, that is not always the case. For example, the OCBC Business Growth Account only requires a minimum initial deposit of $1,000 to open. In addition, you incur a fall below fee of $15 only when your monthly average balance drops below $1,000. The OCBC Business Growth Account also charges a $10 monthly service fee (which is waived for the first two months). On top of that, you get the OCBC Multi-currency Account free of charge. You will be able to transact in up to 13 major currencies with no initial deposit and no fall below fee. This is great if you need to make and receive payments from your suppliers or partners in foreign currencies.
The OCBC Business Growth Account is also the only bank with free all-you-can-use FAST and GIRO transactions. Another increasingly common feature that many businesses require is international money transfer. Typically, when businesses send money overseas, there may be hefty and non-transparent costs involved – which OCBC International Automated Clearing House (IACH) seeks to facilitate. With IACH, there is certainty in i) fees (flat fee of S$30 per transaction), ii) speed (2 to 3 business days), and iii) exact payment value (payee receives full amount). You can perform overseas transfers in nine major currencies.
While this sums up the OCBC Business Growth Account, each business bank account offers slightly different fees and charges. To select an account that best suits your needs, you should look into the nuances more closely.
Besides zooming in on the account fees and charges alone, here are 4 other things that will impact your bottom line.
#1 Digital Tools For Your Business
With the rise of fintech, a business bank account is no longer just a place to keep your company funds safe and to collect and make payments. Operating against the backdrop of a local and global economy still affected by COVID-19, the topic of digital financial and banking tools has become more relevant than ever.
Today, most banks are online and offer various digital tools beyond just their internet banking or mobile banking services. The three local banks have onboarded a host of digital tools to provide greater convenience and better equip businesses to digitalise and grow.
For example, via the OCBC Velocity platform, business bank account holders can track their finances closely. They can utilise a free suite of Business Financial Management tools to track their cash flow – such as recurring monthly payments, future cash receivables and payables, and others – and utilise the information to forecast their future cash position. This can reveal periods of potential financial strains and enable businesses to take action earlier to prevent such cash flow crunches.
Another pain point for many businesses is invoicing. Many businesses spend countless hours issuing invoices to customers and processing payments. This can also involve messy paperwork and is prone to human error. This doesn’t just affect your invoicing procedures and efficiency either, as it can lead to cash flow management issues for your business.
By adopting e-invoicing, this can be smoothened. InvoiceNow, a nationwide e-invoicing network, helps businesses to create invoices in a standard digital format, send it directly to clients on InvoiceNow, and process payment requests automatically. Some business bank accounts, such as those with access to OCBC Velocity, can also help you integrate InvoiceNow for free.
Certain features can also be very bank-specific. For example, OCBC OneCollect is a contactless digital merchant solution offered by OCBC. It enables customer-facing businesses to collect payments made to them from their customers via PayNow or SGQR. This means you get notified when payment is made at point of sale and receive the payments instantly to your business account. Collection details are also conveniently broken down by collection points and, if you own more than one business, across your multiple businesses. For businesses looking to use the service, there are no setup fees or subscription charges, and the only fee charged is a 0.25% transaction fee. What’s more, customers get to enjoy the first 3 months waived for new registration until 31 December 2021.
#2 Rebates from your Business Debit Card
Opening a business bank account may also give you access to a debit card that you can use for business expenses. As you start and grow your business, you are likely to incur a substantial amount of business expenses which can be hard to keep track of. 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.
You also enjoy other benefits such as a 0.5% rebate on foreign currency spend – the highest across the 3 local banks – and 0.2% rebate on local currency spend with no minimum spend. For businesses, this can be a cost-effective way to lower business expenses.
#3 Access to free resources and advice for first-time business owners
Starting a new business can be intimidating. You may spend a considerable amount of time researching and talking to other business owners about licensing, hiring, accounting and so on. In certain cases, your bank may assign a Relationship Manager to provide advice and connect you to the right specialists to guide your decisions.
When you open an account with OCBC, you enjoy immediate access to a dedicated team of specialists to help you get started easily and efficiently. You also get a complimentary Business Starter Kit; a guide to help you avoid common pitfalls, put your books in order, and get things done right on your first try.
#4 Assurance that your funds are safe with a reputable bank
Banks in Singapore are highly regulated, and rightly so. None of us would want to open and keep funds with a bank that doesn’t have a stellar reputation.
If you’re opening a business bank account in Singapore, you would typically look at one of the three local banks, including OCBC. This is because almost everyone in Singapore would already be familiar with the local banks as we use them for our personal banking. Since you already understand the service standards and interface, it may be wise to also open a business banking account with the same bank.
Nevertheless, if you want to venture beyond just local banks, there are currently 10 Qualifying Full Banks in Singapore that are licenced by the Monetary Authority of Singapore (MAS). You can also consider the banks’ network and global presence for the business you are running.
For example, OCBC is strongly entrenched in the Singapore market with their own unique features that clients can tap on. Beyond local shores, OCBC is also well-established in ASEAN and China. This makes them highly suitable for Singapore companies who may wish to expand into these regional markets.
Opening A Suitable Business Banking Account
Every business will have its unique requirements in a suitable business banking account. This is why you should assess the features offered by the various business bank accounts offered in the market.
A brand new e-commerce business may require very different features compared to an established F&B outlet. Nevertheless, OCBC business bank account is packed with useful tools that business owners in various industries can tap on.
It’s also not always about costs and digital tools. Ideally, you want to work with a bank that you can grow with. This means considering if they have a footprint in the regions you are operating in or expanding into.
Those opening the OCBC Business Growth Account can be assured that you can open your business account entirely online and instantly (for locally incorporated companies owned by up to two Singaporeans and PRs only), subject to the bank’s approval.
Need Financing Support During This Period?
Enjoy fast access to funds and receive your loan approval status instantly when you apply online with OCBC.
For SMEs that are just six months into operations, secure up to S$100,000 with the OCBC Business First Loan . If your SME is above two years old, secure up to S$700,000 with the OCBC Business Term Loan – good for funding business operations or expansion. Terms and conditions apply.
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