Having a separate commercial bank account is not just an administrative formality; it's a necessity. It streamlines financial management, facilitates accurate accounting, and protects personal assets. But the process of choosing and opening an account comes with its own set of challenges and pitfalls. This blog aims to guide you through common mistakes and their solutions, ensuring you make informed decisions suited to your business needs.

Mistake 1: Not Comparing Bank Offers

The dangers: It's understandable to want to get administrative tasks like opening a bank account off your to-do list as quickly as possible, especially when you're in the midst of launching a new business. Before committing to a business account, it’s essential to thoroughly evaluate its features and benefits, moving beyond immediate rewards and incentives to ensure optimal financial management.The banking industry is highly competitive, with institutions vying for your business through various incentives and features.


The solution: Conduct comprehensive research on various bank accounts, comparing their account fees, interest rates, and balance fees. These factors can significantly influence your choice of account. 


  • List your requirements: Identify your business needs and requirements from a business account. Do you require an account that allows a high number of monthly transactions, or is an account with high-yield interest rate more beneficial to you? Make a list.

  • Online comparison tools: Utilise online platforms that allow you to compare different business bank accounts.

Mistake 2: Not Reading the Fine Print

The dangers: When opening a business bank account, overlooking the details in your agreement can lead to various challenges and costs that you didn't anticipate, such as: 


  • Unplanned fees: Most banks have a schedule of fees for services like remittance, overdrafts, or even inactivity. 

  • Minimum balance requirements: Some accounts require a minimum monthly or daily balance. Fall below, and you could face charges.


The solution: Before deciding on your business bank account, engage in a thorough review and consultation of the terms and conditions. Never hesitate to ask your bank's representative to clarify points you don't understand.

Mistake 3: Combining Personal and Business Finance

The dangers: The temptation to streamline your financial life by using a single bank account for both personal and business expenses is understandable but filled with risks. Mixing the two can create several issues, including:


  • Credibility issues: Professionalism is a crucial aspect of any business, and having a dedicated business account underscores your commitment and seriousness to clients, vendors, and even potential investors. Using a personal account for business transactions could raise questions about your credibility and the legitimacy of your business.

  • Legal risks: If your business is an LLC or a corporation, mixing personal and business finances can jeopardise the distinct legal status of your company, possibly holding you personally liable for business debts and legal responsibilities.


The solution: While the problems that come with mixing personal and business finances are many, the solution is simple: open a dedicated business bank account. 


Various business accounts offer different features. CIMB, for instance, has CIMB BusinessGo and CIMB SME Account , designed to cater to diverse business needs. CIMB SME Account operates on a zero-fee concept suitable for small businesses, while CIMB BusinessGo offers a high interest rate, making it apt for companies with higher cash balances. In fact, if you sign up for a CIMB BusinessGo account by 31 May 2023, you can earn 2.88%* p.a. on your account balances.

Mistake 4: Not Checking Your Documents Properly

The dangers: Applying for a business bank account requires certain key documents for verification. Missing out on or submitting outdated paperwork can result in: 


  • Application delays: Banks have a stringent verification process, and any missing or incorrect information can significantly slow down the application process.

  • Account rejections: In worst-case scenarios, inconsistencies or missing information can result in the outright rejection of your application. 

  • Operational setbacks: Time is often of the essence for businesses, and these delays can impact other timelines, such as payroll, vendor payments, and even the launch of the business itself.


The solution: Familiarise yourself with what you need to open a business account to facilitate a smoother application process. Make a comprehensive list of all required documents. Commonly needed documents for a business account (for Private Limited/Public Company) with CIMB include:


  • Certified true copy of Memorandum and Articles of Association or Constitution (to be signed by two directors or one director & one secretary)

  • Identification docs (NRIC, passport, an image of yourself holding these documents)


Additionally, CIMB has different documentation requirements for Singaporeans, Malaysians, PR, and foreigners, so make sure you’re fulfilling your category-specific requirements. 


It's also important to recognise that the documentation requirements for opening a business bank account can vary by the type of business you're running. Whether you own a Private Limited Company, a Partnership, or operate as a Sole Proprietor, CIMB's document requirements will differ.


By being meticulous in your document preparation, you not only accelerate the application process but also mitigate the risks of delays and rejections. This proactive approach will save you time and stress in the long run.

Mistake 5: Not Reviewing the Account Regularly

The dangers: Failing to regularly review your business bank account can have a range of negative consequences, including:


  • Unnoticed fees: Many bank accounts have various fees for services or if certain requirements aren't met. Without regular checks, these fees can accumulate without your notice, affecting your bottom line.

  • Missed opportunities: Banks frequently update their services, offering new features, better interest rates, or promotional bonuses. Not keeping an eye out for these means you may miss out on opportunities to maximise your funds. CIMB is currently offering a special promo for the BusinessGo Account: Enjoy 2.88% per annum interest on your balances until 30 June 2024. Post-promotion, your BusinessGo Account will retain a robust base interest rate of up to 2%, ensuring your finances continue to grow.

  • Inefficient cash management: If you don't have a clear grasp of how much money is coming in (inflows) and going out (outflows) , you may find yourself short of cash when you need it. You might miss opportunities to invest excess funds, or you could incur unnecessary costs. This could hamper your daily business operations, potentially stunting growth or leading to operational setbacks.


The solution: Regularly schedule account audits and develop robust cash management strategies. Monitor fees, transaction limits, and any new offers. Many banks, including CIMB, offer online banking platforms that provide real-time insights into your account. 


Use these tools to keep tabs on your account status. If you have concerns about your account, the quickest way to resolve them is often to consult with a bank representative. They can provide up-to-date information and tailored advice.

How to Open a Business Bank Account with CIMB

I. Online Application Guide


Upon visiting CIMB's online application platform, you will be given two options for filling in the application: you can either log in using Myinfo/Corpass or manually enter your details using your UEN (Unique Entity Number)/Registration Number. 


Prepare all the documents needed and you can complete the online application process in 15 mins!


  • Step 1: Verify info – Check that company and shareholder details are correct.

  • Step 2: Assign signers – Pick who can sign on behalf of the business.

  • Step 3: Set contact & alerts – Enter your contact details and set up notifications for account activities like transactions.

  • Step 4: Confirm board approval – Make sure the details of the authorised person align with the company’s Board Resolution.

  • Step 5: Declare legal status – Confirm your tax status, and make sure you're in compliance with international laws. Then, read and agree to the terms and conditions.

  • Step 6: Upload important docs – Upload all necessary documents. This usually includes your M&AA, identification, and sample signatures.

  • Step 7: Review & submit – Double-check everything and hit 'Submit.'

  • Step 8: Await web confirmation – You'll get an on-screen acknowledgement once submitted.


If you're unsure about any part of the application process, CIMB offers a comprehensive guide to opening your new business bank account online.

Grow Your Business with CIMB

Opening a business bank account is a pivotal step in setting your business up for financial success. Avoiding these common mistakes can make the process smoother and more beneficial in the long term. Whether you are a small business or a medium-sized company, CIMB's range of commercial accounts, such as CIMB BizGo and CIMB SME Account, offer a fit for every business need. 


Ready to take the next step in securing your business' financial future? Open a CIMB business bank account today and experience the difference.



Deposit Insurance Scheme

Singapore dollar deposits of non-bank depositors are insured by the Singapore Deposit Insurance Corporation, for up to S$100,000 in aggregate per depositor per Scheme member by law. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured. 

#Business #Entrepreneur #Financing #SME #Corporates