Startup bank shopping

By Jurij Skornik, business and product development at iMoney Singapore.

Here at iMoney.sg we offer free comparison of financial products available in Singapore. Being a startup that has already grown out of its beginning period, we felt like sharing our experiences and advice on choosing the right bank for your newly formed company.

There are many things to consider when registering a new firm. Choosing a bank that will fit with your company’s needs, culture and future aspirations is definitely one of the more important ones.

While the bank where you hold personal accounts excellent in that department, this might not hold true for business banking, so you should not rely on that consideration alone.

Where to Start?

The single most important criterion when bank-shopping are needs of the company. So before you even start looking for a bank, ask yourself what your company’s needs actually are – it’s rather difficult to find a match if you don’t know what you are looking for!

You aren’t just selecting a bank for the present, but also for the future. Startups are usually very dynamic and can grow very quickly, developing banking needs that didn’t exist a couple of months back. Don’t be caught moving from bank to bank looking like you’re chasing your own tail.

For example, if your only need right now is online banking services, consider whether the company might need a more personal approach that includes a personal financial advisor in the future.

Fees Galore

Banks are institutions that make money in different ways. That includes charging fees to their beloved customers – businesses and individuals alike. While banking regulations provide a lot of restrictions and limitations, making different banks look the same, the fees they charge can sometimes differ by a substantial margin.

Pay attention to even the smallest differences in fees as the total amount can really pile up, and you don’t want to be spending scarce resources on deposit fees and other ridiculous charges banks come up with. Additionally, always look at the fine print unless you want to be unpleasantly surprised by some hidden fee your friendly banker forgot to tell you about.

Getting Started

So, how to get started on this rather time-consuming task? The easiest way will be to compile a list of banks and compare their features and fees head-to-head. See which banks specialize in what you need most and narrow down your list. The features you will want to consider include international requirements (whether you need to be physically present to open an account, for example), wire transfers, payroll services, card services, online/offline banking, business loans and provision of financial information, just to name a few.

After you have narrowed down your list, see which bank will provide you with the best services for the lowest fees – that is most probably the bank you are looking for.

Go big or go home?

Another consideration is whether to pick a large multinational banks or focus more on the smaller local banks. There are no clear cut answers. While research shows that smaller banks are more likely to give loans to startups and smaller companies, larger banks will most probably be able to offer better interest rates.

Many entrepreneurs also think that smaller banks offer a more personal approach and are thus more favorable to startups. This is not to say that larger banks are bad for startups. On the contrary, a larger bank might sometimes provide you with services that smaller banks cannot afford to offer. The bottom line is that you always need to consider your own company’s situation – don’t rely on generic reviews, because what worked for others might not work for you.

As your company develops from a startup into a mature business, it doesn’t hurt to shop around for a new bank periodically. Banks might change their offerings and another bank may become more appropriate for your company sometime in the future. It never hurts to stay updated.

A starting point

To give you a jumpstart, we checked out some of the banks in Singapore. We found that the three most popular startup bank accounts are OCBC’s Business Entrepreneur, DBS’s Entrepreneur’s Account for Start-Ups and Standard Chartered’s BusinessOne. If you are currently searching for a bank for your startup, this is probably a good place to start looking.

The comparison table below will give you an idea of what each of the mentioned business accounts offer.

Related reads:

OCBC bank most popular among S’pore start-ups, but it’s probably not the best

High transaction fees and poor customer service from business banks frustrate entrepreneurs

Image credit: 401(K) 2012

Jurij Skornik is a fervent fan of entrepreneurship. He is currently working on business and product development at iMoney Singapore. Connect with him on LinkedIn.

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