The Motley Fool

60 Second Guide to Choosing a Bank Account

So, you’re ready to open your first bank account. But which should you go for?

0:60 Assess your requirements

If you want to pay bills, need a chequebook, would like the option of an overdraft facility and aren’t too concerned about earning interest, a Current (Checking) Account is the way to go.

However, many Savings Accounts also allow bill/GIRO payments – and they pay interest, too. Some banks even offer combined Saving/Current accounts – current accounts that also earn interest.

And for those able to maintain a balance of $150k or more, Premier Banking Accounts will provide excellent customer service, with the possibility of Rewards Programmes and benefits (although this usually comes at a price).

0:40 Location, location..

If you wish to avoid spending your precious lunch hour queuing (and not for the best Char Kway Teow on the island) look for accounts offering Internet and Telephone Banking.

But if you prefer the personal touch you’ll need a bank with a branch close to your home/office. Alternatively, is it open at weekends?

0:20 Access your cash

Don’t forget you’ll need to withdraw your cash, so take note of the bank ATMs (Automated Teller Machines) you regularly pass by. In Singapore (unlike many countries such as the UK) you can typically only use your own bank’s cash machines – although some institutions, such as DBS and POSB, share their network of ATMS.

If you travel frequently, choose a bank with numerous, international ATMs you can use cheaply (or for free).

Additionally, check if your account offers NETS (Network for Electronic Transfers). It’s a convenient, cashless method to pay for goods at most retailers – all you need is your ATM card and PIN number.

0:10 Charges

Finally, most bank accounts require you to maintain a Minimum Daily Balance (usually between $1k-$5k). Drop below this and you’ll be slapped with monthly fees. Look for an account with an Auto Top-Up facility (cash will be swept in from a linked Savings Account automatically if you fall beow the minimum balance) to avoid being charged.

And be aware, service fees can be levied for setting up a Giro, issuing a subsequent chequebook, or even closing an account early (local banks charges are often lower than foreign banks).

So choose the account that best (and most economically!) fits your needs.