Economy & Finance
Banks in Singapore
- Expats in Singapore have many different banking options to choose from. For most day-to-day banking, you’ll need a checking account with a local bank. Opening an account is a straight forward process, but be sure to check what paperwork you will need.
- Though there is no limit on the amount of foreign currency you can transfer in to Singaporean current accounts, only bank deposits of up to 50,000 SGD are covered by the deposit insurance scheme.
- Foreign banks can and do operate in Singapore, but are subject to additional restrictions such as the number of branches and currency used for transactions.
- Consider the availability of ATMs when picking your bank; DBS and the former POBS have the largest network amongst the local banks, but several international banks make up the atm⁵ network.
- Though inflation has been a problem in the past, it’s now been brought under control from over 5% in 2011 to 1% in 2016.
Singapore is an important financial hub in Southeast Asia. The financial and insurance industries make a large contribution to the city-state’s tertiary economy, and offer various employment opportunities for jobseekers in Singapore. There is no shortage of banks in Singapore that cater to local customers, permanent residents, and foreign residents alike.
All banks in Singapore are subject to the Monetary Authority. It operates as a central bank, the financial agent of the government, and as a regulator for the local currency, finance, insurance, and securities. Moreover, any bank in Singapore is bound by the legal framework of the Banking Act. It applies to the various kinds of financial institutions active in the metropolis.
What Are My Options?
When it comes to the different types of banks in Singapore, there are several distinctions you need to make.
- Merchant banks vs. commercial banks: the 49 merchant banks deal with matters like corporate finance, mergers and acquisitions, and management consultancy. They are not the go-to for the average expat who wants to open a bank account. For regular banking, head to one of over 100 commercial banks in Singapore.
- Local banks vs. foreign banks: as far as commercial banking is concerned, local regulations distinguish between Singaporean banks and foreign institutions. In addition to the six local corporations, there are several sub-categories for foreign banks: full foreign banks, qualifying full banks, wholesale banks, and offshore banks.
You don’t need to know the exact criteria for each category of foreign bank mentioned above, however, you should be aware of a couple of things. As the name implies, offshore banking offers only offshore accounts. Wholesale banks, on the other hand, provide a broad range of financial services but are limited to one main branch in Singapore, and forbidden from offering financial activities in Singaporean dollars. For these reasons, an offshore bank or a wholesale bank in Singapore is probably not appropriate for your daily business.
Opening a Bank Account in Singapore: The First Steps
There is definitely no lack of banks in Singapore that can provide various savings plans or investment schemes for foreign residents. If you would like to open a savings account or use a bank in Singapore for wealth management, choosing an institution will depend on your personal situation (assets, needs, planned length of stay, etc.). While it’s beyond the scope of this article to give such detailed financial advice, we strongly recommend that you talk to your bank back home or an independent advisor before moving to Singapore.
For everyday financial matters like receiving salary, paying rent, or withdrawing cash, a current account is sufficient. However, though there is no limit on cash imports or transactions from abroad, you should not deposit large sums in this kind of account. Only bank deposits of up to 50,000 SGD are covered by Singapore’s deposit insurance scheme. Account deposits in foreign currency and offshore accounts are not insured at all.
Much like the rest of the world, interest rates remain low on both current and savings accounts. However, bringing the inflation rate under control from over 5% in 2011 to 1% in 2016 has reduced the losses associated with moving money to Singapore. In the second part of this article, we’ll tell you how to find a bank to best suit your needs, and how to open an account.
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