When should you open a second bank account?

While the thought of opening a second bank account could be unnerving, the convenience and perks that you'll enjoy surely make it worth your while.

For most Singaporeans, opening a second bank account is not something that comes to mind until later on in life, when you're looking to buy a car or house. And with so many banks to choose from these days, it's not surprising that opening that second bank account could be daunting, overwhelming, and not to mention, a hassle.

But as financial requirements change over the years, a second bank account could not only help you prepare for that next step in life and put your mind at ease, but also let you enjoy some of the best banking facilities and services available in Singapore.

WHEN YOU ARE GOING ON AN OVERSEAS STUDY PROGRAMME OR INTERNSHIP 

Taking off on that overseas school exchange programme or internship is one life adventure every student would look forward to. Figuring out which bank can help cut down on expenses? Not so much.

Just be sure to check these off your to-do list before you board the flight and you're all set.

• No ATM withdrawal fee waivers

Despite the progress we've made on cashless spend, cash is still an easy way to make payments when overseas.

While most ATM withdrawal fees range from $2 to $5, depending on the amount, banks with international branches, such as UOB, DBS and Maybank, just to name a few, waive charges with cash withdrawals at made at their ATMs overseas.

DBS takes it a step further in Australia with Westpac Group, allowing for free cash withdrawals at partner ATMs with a VISA and MasterCard cards.

• Cashbacks and rebates

These are another useful consideration, with banks such as Citibank waiving foreign exchange conversion fees when using their Debit cards to make payments online or in stores.

DBS also provides up to 10 per cent monthly cashbacks for cashless payments. While these usually run for a few months to a year depending on the bank of choice, there are new promotions and perks to look forward to especially when used overseas.

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• No bank transfers charges

Bank transfers can be a bit trickier, but they are still one of the easiest ways to make sure you have enough money when overseas. Charges for bank transfers are considerably higher and range from $20 to $55, depending on the amount transferred.

However, services like DBS Remit, allow for overseas transfers online at no transfer fee charges and even allow for same-day transfers, instead of the usual three-day processing period.

Keep an eye out for cut-off times though, and make sure your Internet banking facilities are up to speed.

WHEN YOU ARE STARTING YOUR FIRST JOB

Getting that first job offer can be a tipsy mix of excitement and zeal as you set foot into that next stage in life.

But before you sit down with Human Resources and fill in your salary bank account details, finding out which banks offer the best interest rates and perks would set you off to a good start.

• Higher interest for salary credit

Interest rates are often the first stop in the list of reasons to open a second bank account.

The OCBC 360 account offers an effective interest rate of 3.45 per cent p.a on the first $70,000 in the account. You stand to unlock the full bonus interest if you buy insurance or investments from the bank.

You could, perhaps, consider opening this account if you're a fresh graduate, given the relatively low salary crediting (min $2,000/month) and card spending requirements.

On just $500 a month, you could secure the full 0.45 per cent (0.3 per cent on the first $35,000, 0.6 per cent on the next $35,000) bonus interest.

While base annual interest rates start from 0.1 per cent, interest rates can go right up to 3.88 per cent with Standard Chartered Bonus$aver Account, for a monthly salary credit of $3,000 plus bill payments, investments and credit card spends within Standard Charted.

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• Way better perks

Depending on your new employment needs, finding a bank that comes with better perks that suit your new lifestyle, such as overseas work travel, can be to your advantage.

With banks such as UOB, DBS, OCBC and Standard Chartered Bank offering higher interest rates for salary credit plus credit card spends, it helps to look into for cards that would give you higher interest rates, on top of mileage points, cash rebates and other benefits when you spend.

Additionally, some banks have no foreign exchange fees are incurred when overseas, so you have extra peace of mind when travelling while enjoying preferred foreign exchange rates for up to 11 currencies.

WHEN YOU HAVE SOMETHING TO SAVE FOR

Having settled into that new job, it's only natural to look at fulfilling some of those dreams you've had that would require a bit more of a splurge.

• Higher savings interest rates

Depending on how much you can afford to save, opening a second bank account would not only help you keep money aside for that dream spend, but also offer interest rates that go up to 3 per cent per annum for savings that start at $800 per month, with accounts such as POSB eMySavings.

Just make sure not to make withdrawals within the year or the interest rate would revert to the basic 0.05 per cent.

• The multiplier effect

If you have bigger dreams and plan on buying a house or car, there's no question that opening a second bank account would be more beneficial than hanging on to the first one you've had since you were 10.

Similar to the salary credit, multiplier accounts like DBS Multiplier and HSBC Advance, let you garner more annual interest rates when you add more spends such as credit cards, loans, bill payments and insurance.

Additionally, if you're looking into getting a new home, these accounts let you enjoy better interest rates when you take up a home loan.

WHEN YOU'RE STARTING A LIFE TOGETHER

Opening a second bank account is not something that couples often set out to do a year into the relationship.

And while having separate bank accounts is convenient and lends a sense of privacy, exploring the perks of higher interest rates for savings along with card promotions and other benefits would make spending together much easier.

Clearly, opening a second bank account at any stage in your life would benefit your changing financial needs as they occur.

The perks that come with the different banks, along with the services they provide, would mean that all you really need to do is choose one (or more if you like) that meets with your needs. And as those needs change, feel free to look around once more.

This article was first published in SingSaver.