Why open a business account with a bank? | OCBC Business Banking Singapore
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Why open a business account with a bank?

Why open a business account with a bank?

  • 01 November 2021
  • By Dollars and Sense
  • 10 mins read

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 need an account to collect revenue, pay employees and suppliers with, as well as use it 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 – the money you have to deposit at the start when you open a business account
  • Fall below fee – the fee you’ll have to pay if your account balance falls below the minimum
  • Monthly service fee – a monthly fee to keep your business account running
  • Transaction fees – how much you will have need to pay for local and overseas transfers
  • Other types of fees – this includes 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. In fact, the OCBC Business Growth Account does not require a minimum initial deposit to open and only has a S$10 monthly service fee, which is waived for the first two months. You will not incur any fall below fees as this account does not require a minimum balance.

On top of that, you will receive a OCBC Multi-Currency Account for free. This additional account will let you transact in up to 13 major currencies with no initial deposit needed and no fall below fees. This is especially great if you often need to make and receive payments in foreign currencies with your suppliers and partners.

The OCBC Business Growth Account also comes 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 the International Automated Clearing House (IACH) seeks to facilitate. With IACH, there is certainty in fees (flat fee of S$30 per transaction), speed (2 to 3 business days), and payment value (payee receives the full amount). What’s more, you can perform overseas transfers in 9 major currencies.

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 may impact your bottom line.

#1 Digital tools for your business

With the rise of fintech, a business 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 operate online and offer various digital tools beyond their usual internet and mobile banking services. For example, OCBC Bank has a host of digital tools to provide greater convenience and better equip businesses for digitalisation and growth.

With the OCBC Velocity platform, business account holders can track their finances closely and even utilise a free suite of Business Financial Management tools to track their cash flow and utilise the information to forecast future cash flow position. This information includes recurring monthly payments, future cash receivables and payables, and many more. On top of that, businesses can reveal periods of financial strains and take action earlier to prevent potential 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 which is prone to human error. And it doesn’t just affect your invoicing procedures and efficiency, it can also 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 like you create invoices in a standard digital format, send it directly to clients, and process payment requests automatically. And with OCBC Velocity, you can register for InvoiceNow for free.

Another contactless digital merchant solution is OCBC OneCollect. It helps customer-facing businesses collect payments from customers via PayNow and SGQR. This means you will get notified when a payment is made at point of sale and it will be instantly credited 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, new customers who register before 31 December 2021 can enjoy a fee waiver for the first 3 months.

#2 Rebates from your Business Debit Card

Opening a business 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. That’s why, the OCBC Business Account offers you a free OCBC Business Debit Card. This will make accounting much easier because your card transactions are debited directly from your business account and presented in a single consolidated statement.

You will also enjoy other benefits such as a 0.5% rebate on foreign currency spend – the highest across the 3 local banks – and a 0.2% rebate on local currency spend with no minimum spend. For businesses, this can be a cost-effective way to lower everyday expenses.

#3 Access to free resources and advice for first-time business owners

Starting a new business is often intimidating and you may have to spend a considerable amount of time researching and talking to other business owners about licensing, hiring, accounting and so on.

But fret not! When you open an account with OCBC, you can enjoy immediate access to a dedicated team of specialists, ready to help you get started easily and efficiently. You will also get a complimentary Business Starter Kit which will 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 keep funds with a bank that doesn’t have a stellar reputation. You may also need to consider a bank’s 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. Beyond local shores, OCBC is also well-established in ASEAN and China. This is highly suitable for Singapore companies who may wish to expand into these regional markets.

Opening a suitable business account

Every business will have unique requirements for a business account.

A brand new e-commerce business may require very different features compared to an established F&B outlet. Nevertheless, the OCBC Business Growth 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 would 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.

If you are considering to open an OCBC Business Growth Account, you 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.


Disclaimer

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Any opinions or views of third parties expressed in this article are those of the third parties identified, and not those of OCBC Bank. The information provided herein is intended for general circulation and/or discussion purposes only. Before making any decision, please seek independent advice from professional advisors.

No representation or warranty whatsoever in respect of any information provided herein is given by OCBC Bank and it should not be relied upon as such. OCBC Bank does not undertake an obligation to update the information or to correct any inaccuracy that may become apparent at a later time. All information presented is subject to change without notice. OCBC Bank shall not be responsible or liable for any loss or damage whatsoever arising directly or indirectly howsoever in connection with or as a result of any person acting on any information provided herein. Any reference to any specific company, financial product or asset class in whatever way is used for illustrative purposes only and does not constitute a recommendation on the same.


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