Understanding Financial Products

Banking and Cash

Bank Account
A bank account is a convenient way to help you manage your money.
Keep track of savings and expenditure
Your salary or wages can be paid into your account.
You can pay bills, make purchases and receive money

Can be done by visiting a bank branch or by using the banks ATM

Transactions can also be done via phone or mobile

Certain types of accounts also allow you to earn interest

Banks will send monthly or quarterly statements which lists all transactions in the past
month/quarter
Types of Bank Accounts Available
There are three main types of bank accounts: savings, current and fixed deposit accounts.
Each type has its own set of features.
Current, savings or a combined current and savings account will be more useful for day-today money management. (e.g. paying bills)

A fixed deposit account may be preferred for medium to long-term savings

Joint Account
Two or more people wishing to open an account together can open a joint account
Joint-alternate: each of the account holders may perform banking transactions on that
account individually.
You can be held liable for any borrowing on a joint-alternate account even if the account
is operated by a single signatory.
Joint-all: the instruction for the banking transaction must be given by all account holders.
Opening an account:
Get an application form via a bank branch, online or mail.
Get ready supporting documents as requested by the bank.
Understand the Terms and Conditions which apply to the account.
Closing an account may cause you to incur an early account closure fee
CPF Investment Scheme (CPFIS)
Allows you to use your CPF savings to invest in various financial products such as shares,
unit trusts, insurance, and bonds.
Supplementary Requirement Scheme (SRS)
enjoy tax relief while building funds for retirement
Only local banks and selected Qualifying Full Banks are eligible to provide these accounts

Types of Products and Services

Debit Cards
Similar to ATM Cards
Additional Visa or Mastercard branding allowing for signature-based Point-Of-Sale (POS)
transactions
Purchase amount is immediately deducted from bank account (unlike credit cards)
Fees may be charged (e.g. annual fee, replacement fees)
Risks

 Magnetic stripe portioned of debit card can be cloned

Banks in Singapore have replaced magnetic stripe-only cards with chip cards
Risk of forgery (signature-based POS transactions)
Incorrect amount may sometimes be charged
Debit card details may be captured by fraudsters either through skimming or via intercepted
online transactions
Can be used for mail-to-order or online transactions
Some websites have 3D Secure Technology
Inform your bank if you receive a One-Time Password for a transaction not made by
you
Liability (loss/stolen)
Inform the card issuer immediately if the card is lost. If stolen, make a police report and
inform the card issuer.
Once you report the loss, your maximum liability for unauthorised charges prior to reporting
the loss to the card issuer will be capped at $100
Check with bank for its policy on loss/stolen cards
Overdraft
An overdraft facility allows you to write cheques or withdraw cash from your current account
up to the overdraft limit approved.
repayable on demand by the bank at any time.
Interest is calculated based on daily balance overdrawn
unpaid interest is added on to the next months overdrawn amount
interest is usually a % over the banks prime lending rate
Secured overdraft
pledge an asset to the bank as security
Unsecured overdraft
no assets pledged
Features: Approved credit limit, Repayable on demand, No minimum monthly payment, Joint
borrowers allowed.
Fees and Charges: Interest charges, Cheque book charge, Returned cheque charge, Penalty
interest (excess)
GIRO
Convenient method of paying regular bills
Allows the billing vendor to debit your designated bank account to pay your bills
Applying for GIRO
Complete a GIRO application form from billing vendor
GIRO is set-up once the application is approved by both the bank and the billing vendor
About 14 working days from the date of application
Ensure there are sufficient funds in your bank account to pay for the deductions
Currently no fees/charges for GIRO
Except that a service fee may be charged by the bank if there are insufficient funds in your
bank account to cover the GIRO deduction
GIRO transactions can be verified by checking bills from your vendor against bank
statements or savings passbook.
Contact your bank or billing vendor in the case of any discrepancies
Fast and Secure Transfers (FAST)
a new electronic funds transfer service that allows:
a secure and almost immediate transfer of Singapore Dollar (SGD) funds

 between accounts held in the 14 participating banks in Singapore

available 24/7
transfer funds of up to S$50,000 per transaction subject to your daily or monthly withdrawal
limits
no minimum amount
FAST can be accessed via you banks internet banking service
Charges depend on bank
Cheques
A cheque is a paper instrument that orders a payment of money from a bank account
A current account holder can write cheques to order payments of money.
Cheques are provided when customers open a current account.
Cheques are cleared Mondays to Fridays only
Cheque deposit cut-off time is usually by 3.30pm on Mondays-Fridays.
Writing a cheque:
Ensure you have sufficient funds in your account
Cross your cheque where appropriate
Write payees name clearly
Write amount payable clearly
Check all details before signing
Avoid writing post-dated cheques
Stopping payment
must be done before cheque is cleared or encashed
administrative fee may be charged
Keeping track
Record cheques issued in the cheque register provided in the cheque book
Check these transactions against bank statement
Immediately notify bank of any discrepancies
Credit Card
a form of borrowing
convenient method of payment
Can be used at any retailer that accepts your brand of credit card
can be used to shop online
Application
Apply with a card issuer
Your repayment ability will be assessed to determine eligibility and credit limit
Minimum sum
usually 3-5% of outstanding balance or a specified amount
Late fees will not be incurred if minimum sum is paid
Interest will however be charged for any outstanding balance
Facilities
Balance transfer facility
Enables you to transfer your outstanding balances with other card issuers to your credit
card at a lower interest rate for a limited time period
Cash advance facility
Draw extra cash from the credit limit available on your credit card
a fee of 3-6% of the drawn amount may be imposed
Interest is usually charged daily
Zero % Interest Instalment Plan
Credit card issuers sometimes tie up with merchants to offer interest free instalment plans

 monthly instalments must be paid on time or the prevailing interest charge will apply
Free gifts and reward schemes
Your card issuer might offer certain rewards or gifts as you chalk up spending on your
credit card
Some terms and conditions will usually apply
Monthly Statements
Lists all transactions made during the month
Helps you keep track of spending
Pay by the payment due date listed on the statement to avoid late fees
Payments can be made by cheque, Giro, ATM, Phone Banking, AXS Stations, cash via
bank branches or online.
Stored Value Facilities
prepaid instruments that can be used for the payment of goods or services up to the amount
that has been stored in the instrument
EZ-Link card, concession cards, NETS FlashPay, NETS CashCard, mobile prepaid
cards and shopping vouchers are examples of stored value facilities
Single-purpose stored value facility
Can only be used to pay for goods and services provided by its issuer
Multi-purpose stored value facility
Can be used for the purchase of goods and services provided by its issuer as well as other
parties. (e.g. EZ-Link card)
Only widely accepted stored value facilities ("WASVFs") are approved by MAS
NETS CashCard, NETs Flashpay and EZ-Link cards
Factors to consider when purchasing stored value facilities:
Refund and replacement procedures
Expiry dates
Maximum limit of stored value
Money-Changers
Money-changing involves an exchange of notes denominated in different currencies.
Exchange rates may vary depending on market conditions and the money-changers cost of
funds.
Currency should be exchanged at a bank or licensed money-changer
a list of licensed money-changers is available on the MAS website
Tips:
Always settle the full exchange amount at the point of transaction
Choose your money-changer carefully.
Shop around and be wary of special rates offered
Check your notes before you leave
Ensure that you have not received counterfeit notes
Ensure that you have received the correct amount
Obtain a proper receipt as proof of transaction in case of dispute
Remittance
Transfer of funds to persons resident in another country or a territory outside Singapore.
Remittance can be done via a bank or a licensed remittance agent.
In Singapore, it is against the law to operate a remittance business without a valid licence from
the Monetary Authority of Singapore
a list of licensed remittance agents is available on the MAS website
Tips:

 Choose your remittance agents carefully.

Do shop around and be wary of special rates offered.
Find out how your money will be remitted, including the overseas agents they will be using.
Consider both cost (including the commission and exchange rate) and reliability of the
bank/remittance agent and the overseas bank/agent.
Make sure you obtain a proper receipt as proof of transaction in case of dispute.
Contact your beneficiary to ensure he has received the money.
Others
Charge Card
alternative payment mode to using cash when making purchases
issuer and the cardholder enter into an agreement that the debt incurred on the charge
account will be paid in full and by a due date
Standing Orders
Instructions given to bank to regularly transfer a specified amount to a third party
Electronic funds transfer at point of sale (EFTPOS)
Commonly known as NETS
Funds are immediately deducted from your account upon a successful transaction
Payment orders
cashiers orders, demand drafts and telegraphic transfers
Phone banking
Internet or online banking

Things to watch out for

Fees/Charges and services
Banks often reserve the right to vary amounts charged at any time, subject to giving notice to
their customers.
A bank may change the following from time to time
Terms and conditions of the product or service being provided
Fees and charges
Interest rate applicable
Continuity of product or service
Location of premises
Bank account risks
Risk of bank failure - bank will be unable to return money that was deposited
Inflation may erode the value of money placed in long term fixed deposits
A deposit insurance scheme is in place to protect individuals and non-bank depositors in the
event of bank or finance company failure