# To close or not to close a bank account in Singapore



## crownmethod

Hi all,

I would like to ask what the implications are of closing / not closing a bank account in Singapore when you are finishing off your job in Singapore. 

I understand there is a "fee" when closing your bank account within 6 months of opening which is the primary reason why I am asking this question.

There seems to be an obvious way around this "fee" to me, where I could just withdraw my balance gradually from the ATM until it reaches $0. However, this seems a bit too easy, making the "fee" useless. I feel as though there is something missing in my understanding?

If the above method is not applicable, I am also wondering if I could just wait until it pasts 6 months of opening, and I could transfer the money online back to my own account in my home country? Would that be possible through internet banking?

Thanks!


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## BBCWatcher

I only know of two banks in Singapore that even offer accounts with no monthly maintenance fee if you fall below a certain minimum balance. Chances are you don't have one of those accounts.

Is there any particular rush to close the account? Just give your bank your new overseas mailing address and mobile number before you leave, and that should be fine for now. Bear in mind your new counry of residence may have tax and/or financial reporting requirements for your overseas account.

You might have a couple bills to pay in Singapore even after you leave -- IRAS, for example -- and it's easier to do that if you keep the account open and funded for a while.


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## crownmethod

Hi
Thanks for the useful information
I simply would like to know my best option financially speaking, doesn’t matter if it’s long or short term. Keeping in mind, I don’t see myself coming back to Singapore for a very very long time. 
My priority isn’t to close the account, my priority is to minimize my potential financial losses, as I move from Singapore back to my home country. 
What would happen if I choose to leave my bank account at $0 balance? 
In terms of your questions and comments:
1.	I don’t understand the purpose of providing my new overseas mailing address and mobile number before I leave. 
2.	What exactly would happen if I closed my account vs opening my account in terms of the tax issue?
Thanks,


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## BBCWatcher

crownmethod said:


> What would happen if I choose to leave my bank account at $0 balance?


Assuming the bank has a monthly account maintenance charge if you fall below a certain account balance (likely), the bank would start charging you. You would have to pay those maintenance fees -- they are part of your fee agreement with the bank. If you don't pay them, you would likely have a financial delinquency in Singapore. At a minimum that'd wreck your credit history in Singapore.

I don't recommend trashing your own financial reputation in Singapore to save S$50. That's not smart.



> I don’t understand the purpose of providing my new overseas mailing address and mobile number before I leave.


So the bank knows how to reach you to continue providing you important account correspondence, a new debt/ATM card when the old one expires, a new security token when the old one expires, and text messages to the correct mobile phone so that you can log onto online banking, as examples.



> What exactly would happen if I closed my account vs opening my account in terms of the tax issue?


Tax and financial reporting requirements for overseas accounts depend on your new country of residence and/or your country of citizenship. So you'll just check that country/those countries to see what their tax and financial reporting requirements are (if any).

As a random example, the United States requires its citizens and residents to declare the interest income on all bank accounts (including those in Singapore) on tax returns (IRS Form 1040 Schedule B) and, depending on total balance thresholds, to file FinCEN Form 114 and/or IRS Form 8938. Each country sets its own requirements.

Singapore has an income tax in arrears system (not "pay as you go"), meaning you pay income tax on 2015 income in 2016 ("2016 Notice of Assessment" from IRAS). If you've earned income in Singapore in 2015 then you could have a tax bill due in 2016. The easiest way (by far) to pay that tax bill is from...funds held in a bank account in Singapore. When you leave Singapore your employer is supposed to withhold your last salary payment for tax, but that amount may not be sufficient to cover your 2016 Notice of Assessment. So how do you plan to pay the remaining tax balance (if any)? In the alternative, the easiest and generally low cost way to receive a refund for overpayment is into your bank account in Singapore. How do you plan to receive any tax refund in 2016 if you're owed one?

Again, what's the rush to close the account?


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## crownmethod

Thank you for all the information, it has given me a lot to ponder, but more importantly it has cleared up a lot of misconceptions and confusions.

This leads me on to the final question I have to ask:

The "closing fee" is waived after 6 months, would I be able to close the account over the phone after the fee is waived? Could the funds be easily transferred overseas back to my country of residence?

Apologies for the stupid questions! I don't have too much experience as an expat!


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## BBCWatcher

Yes, you can close the account from afar (preferably after all your IRAS-related matters are settled and you're sure that you won't be receiving or paying out any more money in Singapore). The bank can remit the proceeds from the account in at least a couple different ways. That's in part why it's a good idea to keep your bank informed of your next address and phone number, so they already know where to mail the foreign demand draft (if that's how you choose to withdraw funds when closing the account).


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## simonsays

BBCWatcher said:


> ..


Ok, I know you like to give totally alternate solutions, as you think totally out of the box.

Here's the problem:

1) You must clear IRAS taxes before leaving, or your employer will be fined. So you must ensure it done. No two words about it. So I don't see the why you need to keep an account here, just for the absurd reason of paying IRAS dues.

And as long as the Employer submits the IR21, IRAS will issue the final tax assessment very fast. Unless you are leaving with a dispute with the employer, in which case, the tax is the last thing to trip you.

And IRAS assesments are final. So far in the 10 + years here, I have never seen IRAS asking anybody to pay more for their wrong assessment, and on the contrary, IRAS has refunded sums, sums which you can cash in any bank, outside Singapore as well.

2) Employer has amount due to you ? Ask them to issue a cheque and cash it back home. Leaving a local account just for this purpose beats me.

3) Leave a forwarding address ? For me, unless you have a pressing need, that's a double edged sword.

In some cases, when the dues get accumulated - example: Low balance fee, the bank will come after your residential address, and worse, some international banks have sent debt collectors to the house with mafia like looks - just to collect something like 500 $. Small money in Singapore, but in some countries, a 25% collection fee is enough to kill people.

4) Early closing fees etc ? Well, you better ask the bank, than ask on an anymous forum. Citi had such a system, but they waived the fees if you nicely told them you are leaving. And give them some proof such as the SVP issued upon termination of EP.

5) Maintenance fee: I am not sure which bank you are on, but as said by BBCw said, the fees can add up quickly and for me, I would CLOSE IT and go, than leave it, and then find a few perfectly legal small lettered terms kicked in, so your penalty for insufficient funds suddently balooned to too much, including any GIRO and all which will incur fees for lack of funds.

I rest my case.


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## BBCWatcher

I do not disagree that IRAS can move quickly, but it is still possible, even common, to have tax due or a tax refund owed after leaving Singapore.

The rest I generally disagree with except that it doesn't hurt to ask the bank about waiving account closure fees. *But what's the rush to close the account?* It's not doing any harm, and it won't be lonely if you're overseas!


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## simonsays

BBCWatcher said:


> I do not disagree that IRAS can move quickly, but it is still possible, even common, to have tax due or a tax refund owed after leaving Singapore.
> 
> The rest I generally disagree with except that it doesn't hurt to ask the bank about waiving account closure fees. *But what's the rush to close the account?* It's not doing any harm, and it won't be lonely if you're overseas!


To be honest, you need to accept others also have alternate views and experience. And insisting - based on some unfounded or out of this world theory - that your view is right and is the Holy Gospel, and no second thoughts allowed- doesn't make it right. however outlandish your suggestions may be (like suggesting folks to leave their parents in Malaysia, or leaving a banned dog in Indonesia)

Let me rephrase that - in 100% of cases where I helped company HR- for EP holders leaving, IRAS processed the Tax clearance and instructed the employer to release any monies due, upon payment of tax due. It didn't take like forever. And I can count more than 100 cases and counting. And average processing time is less than 2 weeks, and shorter if you make a visit to the IRAS. As short as 3 days in cases. 

The only cases that hit a road block were those where employers refused to give an IR21, out of spite, and that's not IRAS fault. And it ended up the employer was fined by IRAS, not the employee, when the facts were presented. And minus a tax clearance, departing Singapore is illegal - so that fact is moot anyway.

And I never, never, never heard of IRAS coming after anybody for dues, after issuing the clearance. The Tax is calculated based on IR21, and if there were errors, it was the employer who was made to pay, not the departing/departed employee.

On the contrary, at times they did refund excess, as cheque, cheque that can be cashed anywhere in the world. And not sent to a 'designated' bank account. If you been in Singapore long enough, you will know why all prefer cheques than 'wire transfer'. Or maybe you do not know why it's a cheque.

Per your logic, nobody should close any bank account, if they leave Singapore. And incur maintenance / low balance fee and what not. And then go with the additional pains that come - and outlandish example, an unsolicited CC and the unsolicited Fee etc. etc. 

 No offense.

I hope I didn't rain on your parade ! :welcome:


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## BBCWatcher

I'll note you still haven't answered the question I posed: "why close it now?" If there's a good reason to close the account now, fantastic! I'm not opposed! But what is it? There are reasons not to, including an early account closure fee.


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## simonsays

BBCWatcher said:


> I'll note you still haven't answered the question I posed: "why close it now?" If there's a good reason to close the account now, fantastic! I'm not opposed! But what is it? There are reasons not to, including an early account closure fee.


So I have to prove why your outlandish recommendation to keep the account is wrong ?

So, let me put it this way, you or me have no clue how much is the early account closure fee is, but you are forcing your way, as usual, insisting it is correct to keep the account open ?

And then justifying your point by insisting IRAS may ask for additional taxes, something that's never heard of, and that's a good reason to keep the account active ? 

Leave the account and then run the risk of running ending up paying maintenance fee for low balance which may snowball to a few hundred dollars very easily, and then ???

Or some utility or somebody else to send a GIRO deduction and then that too incur additional penalties ? Yes, that happens, even after you have informed the PUB/Singtel/SCV folks to terminate the account. FYI, it's not your fault if you closed your account, but it becomes your fault if the utility send a penalty charge.

No worries, you can have the last word.

PS, are you a professor by any chance, you insist that every theory must be challenged, however outlandish or impossible the possibility of it occurring may be ?


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## BBCWatcher

simonsays said:


> So I have to prove why your outlandish recommendation to keep the account is wrong ?


Well, in a word, yes. (And there's nothing "outlandish" about keeping a bank account open for a while.)

Crownmethod has only two options at any moment in time: keep the account open, or close it. There are possible reasons to keep the account open including avoidance of an early account closure fee. So what are the good reasons to close the account now? Unpaid bills that still need resolving are good reasons not to close the account now!

With respect to your remark that IRAS can issue a check for a tax refund, yes, that's true -- as I implied upthread. Here's the problem: cashing that refund check in a foreign country almost always incurs a separate bank fee per foreign check, usually a substantial one. Depositing that refund in a Singapore bank account does not incur a separate fee, and even if that account is closed and balance paid out as a paper check, it's only one check incurring one foreign check fee once. Crownmethod is trying to avoid an early account closure fee right now. I'm not sure why Crownmethod would want to incur an early account closure fee and a foreign check cashing fee in the event a tax refund is owed and a check cashing fee for the account balance (if he withdraws that way). (And that's assuming _one_ refund check. If Crownmethod is getting back other deposits he/she made, that'd be more separate fees with paper checks cashed overseas.)

Again, I don't care either way! I'm just asking the simple question: what's the benefit to closing the account _now_? One possible reason I can think of is the one I already mentioned upthread: foreign (non-Singapore) tax and financial reporting requirements. But if it's the United States (to pick an example), that bridge is already well crossed. If it's another country that'll depend on that country, as I already pointed out. Another possible reason to close sooner rather than later: cash flow problems. If you need every dollar _now_, urgently, then maybe that's your only choice, even if you do have to pay a penalty/higher cost.

Hypotheses are wonderful and all, but "what's the rush"? If there's no good answer to that question, then just leave the account open for a while! It's not hurting anybody. I'm not fussed either way, but one hopes anyone would approach this question with logic and reason applied in good measure.


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## simonsays

BBCWatcher said:


> Hypotheses are wonderful and all, but "what's the rush"? If there's no good answer to that question, then just leave the account open for a while! It's not hurting anybody. I'm not fussed either way, but one hopes anyone would approach this question with logic and reason applied in good measure.


Got it, to, to make you happy, I agree, you are 100% correct, as always !  

Hope your Monday is great as well !


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