What is a Current Account?
Current Account is an account with any bank from which money can be withdrawn without notice. It is typically an active account that cater to frequent withdrawals by cheque and deposits, and it comes with ATM and Debit Cards.
Current Account is usually opened by businessmen who have higher number of transaction with the bank. It can include withdrawals, deposits and contra transactions.
Why is Current Account important in Singapore?
Current Account balance is used to measure a country’s foreign trade. Current Account surplus means that the value of the country’s net foreign assets has grown over the period.
In Singapore, Current Account can be opened in a commercial bank and is suitable for making payments to creditors by using cheques. Cheques are deposited in the Current Account for collection.
Current Accounts are also known as Checking Accounts.
What are the features of Current Account?
Following are the main features of Current Account:
- Current Accounts are opened to run a business.
- Compared to Savings Account, a higher minimum balance is to be maintained in Current Account.
- This is a non-interest bearing account.
- Penalty is charged when no minimum balance is maintained.
- Interest is charged on funds borrowed from bank for short term.
- There is no fixed period to hold a Current Account.
- This doesn’t promote savings habit.
- The main objective is to help the businessmen to conduct their monthly transactions smoothly.
- There is no restrictions on the amount or on the number of deposits made.
- There is no restriction on the withdrawals made as long as there is sufficient balance in the account.
Benefits of Current Account
Following are the benefits of Current Account:
- Businessmen like proprietors, public and private companies, partnership firms, association of persons, trusts, etc. who have a large number of transactions on a daily basis can open a Current Account.
- Businessmen can carry out their business truncations promptly.
- There is no limit on the cash being withdrawn as long as there is sufficient fund in the account.
- The deposits can be made to the Current Account through any branch.
- By issuing pay order, cheques or demand draft, businessmen can make direct payment to the creditors.
- Bank can collect money on behalf of the customer.
- Overdraft facility is made available to the customer.
- Through inter-bank connection, creditors can get credit worthy information of the account holder.
- Industrial progress of the country is facilitated as the banks help businessmen run their businesses with ease.
- Internet banking and mobile banking facilities are made available.
- Withdrawal and deposits can be made from anywhere.
- Electronic funds transfer is available.
- Bank statements are sent or estatements are available to the customer.
Types of Current Account offered
There are three types of Current Accounts being offered in Singapore. They are:
- Conventional Current Account:
You get the flexible payment option. You also get the facilities of internet banking, mobile banking, phone banking, e-statements, credit or debit card, etc. You can also give standing instructions. Overdraft facility, auto issue of cheque book, GIRO Facility, automated top-ups linking to current and savings account is available. The account is non-interest bearing. Standard Current Account holders can enjoy protection of up to S$50,000 per depositor per bank. Singapore Deposit Insurance Corporation insures the depositors.
- Foreign Currency Current Account:
Foreign Currency Current Account is offered for USD, EUR, GBP, AUD, CHF, AUD and HKD. Cheque book facility is made available.
- Islamic Current Account:
The Islamic Current Account provides the basic features of traditional Current Account while it is Shariah compliant. They are offered on the Shariah principle of Wadiah which is safekeeping. Singapore Deposit Insurance Corporation protection is offered to Islamic Current Account.
Factors to consider while opening a Current Account
You must consider the following while opening a Current Account in Singapore:
If the bank you are opening the Current Account don’t have too many branches, you must ascertain if net banking facility or phone banking or phone banking facility is available. This will eventually save you time and money just to drive to your bank to deposit or withdraw.
- ATM fees:
Money withdrawn from the bank’s ATM doesn’t incur any transaction fee. But, if you are travelling, there will be transaction fees charged. You must find an account that reimburses the ATM fees.
- Minimum account balance:
There is usually a restriction on the minimum account balance that is to be maintained. If you drop below the minimum balance, you will be charged a penalty. If you are linking your Current Account to Savings Account, then the balance difference will be transferred from your Savings Account. You need to check how convenient it is for you and then take a call.
- Interest rate:
Though most banks don’t offer interest on the Current Account balance, there are a few that offer interest. So, shop around and then choose the account that best fits your lifestyle.
- Overdraft facility:
Check if the bank offers you an overdraft facility. If you think you might not need it, you will never know, it is safe to be prepared for the uncertain future.
How to open a Current Account?
There are various ways you can apply for Current Account in Singapore:
- Phone Banking:
If you have any account with a particular bank, you can call the bank on their phone banking hotline number and ask about the Current Account details and ask the representative to start the application process.
- Request for a call:
When you visit a bank’s website, they usually have a section where you can request for a call back. You need to fill out the details and you can give the preferred time when you want to get a call from the bank’s representative.
- Visit the bank:
The best option out of all is visiting the bank. You will get to speak to the representative face-to-face and clear out all queries and if you have carried all the required documents, you can initiate the account opening process. Most banks prefer if you visit the nearest branch.
Different Current Accounts offered in Singapore
Following are the various current Accounts offered in Singapore:
- Bank of China Current Account
- CIMB Foreign Currency Current Account
- CIMB Multi-Currency Account
- CIMB Starsaver Account
- CIMB Starsaver-I Account
- Citibank Current Account
- HSBC Foreign Currency Current Account
- HSBC Singapore Dollar Current Account
- Maybank Current Account
- POSB Current Account
- UOB Current Account