Bank accounts are a convenient tool to help you keep and manage funds from your sources of income. Through your bank account, you can monitor how much goes into savings and how much you take for expenses. Employers require you to have a bank account through which your salary/wages are paid.

You can also use your bank account to directly pay for purchases, expenses and financial obligations through debit cards and direct debits. Cash deposits and cheques are also made into your bank account. These transactions are available at a bank branch or through Automated Teller Machines, which are found in many common places in different cities.

Depending on the bank, you can also transact through your phone or by online banking. Some accounts have the provision for earning interest on deposits. The bank sends a monthly, yearly or quarterly statement detailing all transactions in your account for the period. These statements can be accessed online or through the mail depending on your agreement with the bank.

If you want to access your account online or through mobile banking, you must specifically apply for these services. Only such customers can also get e-statements or check the state of their accounts online.

Fees and charges for banking

Every bank has the details of their pricing plans for all accounts and other services available at the bank. These plans provide details of transaction and service fees and charges. Before opening any account, it’s important to go through the guide carefully in order to know what fees you’ll be subject to.

Some services that are charged include cash withdrawals over-the-counter or through an ATM, early withdrawals on fixed deposit accounts, acquisition of cheques books and debit/credit cards, among others. Some banks have a monthly service/administration charge on their accounts.

The bank reserves the right to alter the fees and charges levied for products and services, but they have an obligation to communicate the same to affected customers in advance. A few things which the bank can change subject to offering notice include:

  • Terms and conditions related to specific products and/or services
  • Charges and fees
  • Interest rates for deposits and loans
  • Availability of any product or service
  • Location of business premises

When the bank wishes to make changes to any of the above, they are obligated to notify consumers through their account statements, messages on ATMs and in the branches, on their official website, through email or post as well as advertisements and announcements in the media.

Are there risks to operating bank accounts?

Once you have placed your money within a bank account, you are open to the risk of the bank failing to return your funds to you due to bank failure. Fraud and theft are two other risks inherent in operating a bank account.

However, the banking system in Singapore is generally sound. This is not to say that things cannot go wrong – we are living in a complex globalized environment which exposes us to greater risk. In the past, some global, reputable and well-managed banks have failed, causing customers to lose all their savings in the bank.

To date, Singapore has yet to experience a total bank failure, but this is no guarantee that the same cannot happen at one time in the future. When the bank fails, its ordinary depositors lose all their savings accumulated in the bank.

Another risk specific to customers operating long-term fixed deposit accounts is the risk of inflation, which reduces the value of money saved.

Deposit insurance

Deposit insurance is a policy created to protect the interest of individual/non-bank customers in case the bank finance company fails. Through the scheme, Singapore dollar deposits maintained in fixed deposit, current or savings accounts in a full financial institution or bank are secured, upto a sum of S$ 50,000 for every insured depositor in the policy-holding scheme.

Also, funds in bank deposit accounts under CPF Minimum Sum Scheme or CPF Investment Scheme are added and separately insured to a maximum of S$50,000. Joint accounts are also protected under the Deposit Insurance scheme.

To keep your account safe, ensure your ATM card is safe and the PIN remains secret. Destroy the original PIN document once you have mastered it, and don’t replace it with easily recognizable dates, like your birth-year. Also, ensure that your passbook and cheque books remain in a safe place when not in use.

How safe is Internet banking?

It is the duty of every bank to ensure the absolute security of online banking facilities and official websites. The banks usually come with additional measures specific to the bank itself to ensure security of their clients.

For instance, some banks have 2-step authentication where after inserting username and password, the bank sends a one-time code to your registered number to prove that you are the one accessing the account. To ensure your own security, ensure that your online transactions are carried out on secure networks, and sign out after every online visit, especially if using a shared computer.