Why Every MSME Needs a Business Savings Account

As you start your business, one of the first things you must consider is opening a business savings account.

Given today’s business landscape, having a dedicated business savings account is not just a “nice to have” anymore—it’s the cornerstone for your sustainable growth. Not only does it make your finances easier to manage, but it also legitimises your business and improves your image as you transact with other businesses.

What is a business savings account?

Often called a corporate bank account or, more simply, a business account, a business savings account is designed specifically for business transactions.

While a personal savings account caters to individual financial needs, a business savings account is tailored to manage a company’s financial activities. It also offers features specifically for businesses – higher transaction limits, tools for financial management, and other perks related to different business transactions.

As an entrepreneur, you might be tempted to use your personal savings account for business transactions, especially if you’re still working with smaller amounts. However, to improve accounting and reduce legal liability,1 it’s best to separate business finances from personal finances.

This makes your business finances easier to manage and less likely to catch the attention of authorities, especially for tax and accounting purposes.

A business savings account also provides a secure and accessible platform for businesses to store their surplus funds. Not only does this safeguard capital, but it also allows businesses to earn interest on their savings, contributing to their overall financial health.

Related article: Singapore’s best business accounts: a how-to guide for entrepreneurs

Checking account versus savings account: What’s the difference?

You have two options when it comes to business accounts: checking accounts and savings accounts. Each has distinct purposes and offers unique benefits:

• Checking accounts are designed for day-to-day transactions. They facilitate easy deposits, withdrawals, and payments. Their key features include debit cards, cheque books, and online banking access. A checking account is ideal for managing operational expenses, payroll, and vendor payments.
• Savings accounts, on the other hand, are geared towards saving and growing your money. They typically offer higher interest rates than checking accounts, allowing your funds to grow over time. While they may have limits on the number of withdrawals, they are ideal for setting aside funds for taxes, emergencies, or future investments.

The advantages of a business savings account

A business savings account offers several benefits that can help boost your business:

• Better control over spending: By separating your savings from your operational funds, you gain better visibility into your financial resources. This promotes disciplined spending and prevents overspending.
• Protection and security: Business savings accounts offer a secure haven for your hard-earned money. In Singapore, they are also insured under the Deposit Insurance (DI) Scheme, ensuring your funds are protected up to allowable limits².
• Leverage your interest: Unlike checking accounts, savings accounts offer interest on your deposits. This allows your money to grow passively, contributing to your business’s financial stability.
• Provide a financial cushion: A business savings account can also act as a financial safety net. It provides a buffer for unexpected expenses, market fluctuations, or economic downturns, ensuring your business can weather challenges.

Open a business savings account today

Today’s business environment can be very cut-throat. A business savings account is an indispensable tool that can give your business a leg up against the competition. In choosing the right business savings account, you can gain better control over your spending, protect your assets, and leverage your interest to build a stronger financial future.

At ANEXT Bank, we understand the unique needs of MSMEs, and we designed our business savings account with MSMEs in mind. You can open a business account with S$0, with no annual fees and no minimum maintaining balance. Grow at your own pace, with daily interest and higher yields on your SGD and USD account balances.

And opening an ANEXT Business Account is as easy as 1-2-3:

1. Apply with Corppass³ or MyInfo business.⁴  All Singapore-incorporated businesses can apply. Check your eligibility and manage access on the official Corppass website before applying.
2. Verify company details. Your online application will be pre-filled with your business information. You’ll receive a link via email or SMS to confirm your company details and business account application details.
3. Authorise application. Your appointed company representatives must then authorise the application to open your business account.