Switching business bank accounts - Things you should know
There could be many reasons why a business established in Singapore might want to switch business bank accounts.
The reason may be that you are not satisfied with the current service or the account does not provide you with specific features that your company needs in order to manage your finances and carry out business activities efficiently.
The following requirements and documents are needed while changing business bank accounts or opening a new one:
• Photo identification - This can be any legal government identification document that has a picture of you on it.
• Passport or NRIC - You also need to have your passport or NRIC(National Registration Identity Card) with you.
• Existing bank account information - Proof that implies enough money to meet the minimum balance requirement. When opening a new corporate bank account you must have a minimum balance as per the bank’s policy.
• Resolution by the company’s board of directors - This is basically a document that certifies that board members have together reached an agreement and made a common decision.
• A copy of the company’s certificate of incorporation
• A copy of the company’s business profile
• A copy of the company’s Memorandum and articles of association (MAA)
• Proof of residential address - The residential address of the beneficiaries and directors of the company.
The company must provide copies of all the documents mentioned above and also have the original documents with them in case the bank asks for them. The copies must also be certified ‘True’ by a company secretary or director.
The laws regulating the opening and closing of bank accounts in Singapore and very strict and depending on the bank you are switching to may require that the directors or account signatories be present in person to sign all the documents during the opening of the new business corporate bank account.
If not present in person, then some banks also allow the directors to sign the documentation in person overseas in front of a notary.
When you are considering a new banking partner for your business, keep the spending habits and financial operational requirements in mind to research and find the best platform.
It may also turn out that your needs are better met by modern FinTech companies rather than legacy banks operating in Singapore.
The bank you are switching to may or may not have an online process to create a new bank account.
Once the new bank account is created, ensure that you change all the automated processes you might have set and inform vendors regarding the change so that they are aware of money coming in from a different account.
Also, inform your clients so that they do not send money to your old account.
You can choose to leave the old bank account dormant or close it so that no transaction can take place through it.
One of the main reasons that business decides to switch their corporate bank account to another provider is due to the lack of features that you might need.
So when scoping a new provider always ensure you get the full depth of capabilities you get with their product.
A bank or bank account provider may have several offerings and services under their product. You should check whether you can get these separately based on what you need and not have to pay for things that do not fall under your use case.
Finance and accounting operations within businesses today without automation are a nightmare. You should check for all the automation features available and whether they help your finance and accounting departments or not.
How simple and intuitive the process of opening an account is as important as all the benefits you get after you start using that account.
The account provider must have a good reputation when it comes to their customer support team as matters related to money management and transfers need a quick turnaround to not affect your business negatively.
Finally, you must weigh all the pros and cons of a new banking system with the price you must pay to use it and decide whether it is feasible for the company.
Instead of switching from one bank account to another and constantly trying out which one suits your needs, your business should open a multicurrency business account using Volopay.
Our platform is a complete expense management ecosystem that also enables you to send and receive money domestically and internationally using a multicurrency wallet.
A Volopay multicurrency wallet lets your company open and holds money in different currencies without having to switch business bank accounts.
This makes it super easy to transact internationally from one provider and view all transactions in a single dashboard rather than having to manage multiple bank accounts.
You can open and hold money in over 60+ currencies with all the major currencies such as USD, SGD, AUD, EUR, GBP, YEN, CAD, etc. and transact in over 100 countries.
So for example, if you are a business in Singapore that deals with vendors in America, you can create and load money into a ‘USD wallet’. You pay a one-time FX fee to change your SGD into USD and hold that money in the wallet.
Now whenever you have to pay a vendor in the USA, you can simply transfer money from the USD wallet to them and avoid the repetitive FX charges you would have had to pay for an international transaction.
Depending on the type of account and the bank you have an account with, it can be a pretty tedious process to change your bank account, especially for a business entity. There will be a lot of documentation involved and it may take weeks to months for the entire switch to happen.
The reason you are switching banks in Singapore might affect the opportunity to get a loan from another bank in the future. Another downside is that you might have to pay hidden closing fees to the bank.
When you switch your main business bank account, it may have an effect on your credit score but to a very minimal degree. This is because lenders want to see financial stability within a business. Sometimes, the reason for switching bank accounts could be the inability to pay off a previous loan or credit card debt.
Different banks have different account closing policies. You should contact your bank’s customer support and request them to walk you through the process. There is generally a lot of documentation and application filling involved in the process.