An essential part of having good money sense in Singapore lies in opening the right type of bank account. With your own bank account, you can either build your savings, spend for your daily needs without obstruction, or manage different currencies.
A bank account is a must-have for Singaporean citizens and long-time residents of the country, but you can also open one if you’re staying in Singapore for an extended period, for example on business or as a foreign exchange student. This guide will help you choose between a current account vs. savings account, teach you about other account types available, and help you prepare your application.
Bank Account Types You Can Apply For In Singapore
Before you enroll for opening a bank account, you must know which type is best suited for your needs. Here’s an overview of the different account types and what applications each one is ideal for.
A savings account is a type of bank account that earns interest on the money deposited there. You get interest on the money you hold in that account because the bank is technically borrowing your money and repaying you through the interest. It’s the bank that determines exactly how much interest you can get on your account.
As its name implies, a savings account is best for your short-term and long-term savings. Although you can typically withdraw from an ordinary savings account anytime, it’s best not to touch it too often. The less money you spend from that account, the greater the amount of interest you’ll accrue.
A current account can be thought of as the opposite of a savings account. Most current accounts don’t earn interest or earn very little interest compared to savings accounts.
This is the best kind of bank account to open for daily spending, as you can transact with it anytime with few obstructions. It is ideally used to keep money that you need to access frequently for basic everyday necessities or personal and business endeavors, as opposed to savings account apps.
Fixed Term Deposit Account
A fixed term deposit account is a type of bank account that promises a fixed rate of interest. This interest is typically paid at the end of the investment period. The bank rewards the account holder for not touching the funds for a certain amount of time, thus guaranteeing the former some liquidity. The caveat is that the account holder can’t withdraw funds until the term is over, or else they’ll incur a penalty fee.
This is the kind of account you should open for nest egg savings that you know you won’t need to touch. As long as the full deposit stays in your account for the duration of the term, you’ll be sure to earn the interest that’s been promised to you.
Joint Bank Account
A joint bank account is an account that requires more than one person to carry out financial responsibilities. Joint accounts are commonly held between married couples or between children and their parents.
For joint accounts, at least two people are needed to authorize a transaction. If you need to withdraw money from the account or issue a check, the other account holder will have to be a signatory. This is a good type of account to sign up for if you already entrust or share your finances with someone else.
Multi-Currency Bank Account
A multi-currency bank account is a type of account that allows you to manage different currencies in addition to SGD. This is the account of choice for expats or businessmen who need to complete transactions abroad.
This kind of account may require a higher deposit and higher maintenance fees than other accounts. In exchange, having a multi-currency bank account will make foreign exchange and foreign transactions, like remittances, much easier and cheaper to complete. In the long run, the account holder will save a lot of money if they manage their transactions from this type of account.
Requirements for Opening a Bank Account in Singapore
To be eligible to open a bank account in Singapore, you need to be at least 18 years old. It’s worth noting that minors are allowed to open joint accounts with their parents. Different banks have different requirements for opening accounts, but you can expect most of them to require the following:
- Valid government-issued identification
- A completed application form
- The minimum deposit amount
- The account holder’s passport, proof of enrollment or employment, and proof of their residence in Singapore if they’re not Singaporean citizens
Tips To Maintain Singaporean Bank Account
Once you’ve opened your own bank account, don’t forget these reminders. Always read the fine print and be aware of any fees or charges that apply to your account. Make it easier to keep track of these charges or fees by bookmarking the bank’s website or saving an electronic copy of the fine print. Follow any additional guidelines your bank has given you, such as how to issue valid checks from a joint account.
Make sure you meet the average daily balance (ADB) of your account and that you don’t overdraw from it. If your account balance dips below the minimum, you’ll either incur a penalty fee or even risk the closure of your account.
Always keep your ATM card in a safe place and do not disclose its PIN to anybody else. Designate particular portions of your allowance or income as for spending and for saving. This will keep you from overspending and make it easier to save money regularly. As long as you are conscientious about maintaining your account, you’ll be able to practice good financial management and reap the rewards that come with it. For any further inquiries on how to manage your bank account, don’t hesitate to contact the bank’s customer service team.