Opening a bank account is a necessary step for businesses registering in Malaysia. Not only do banks offer services essential for operations, but they also provide additional services that can help to improve cash management or help businesses secure needed funding. However, these services typically come at a price. Understanding the various charges that come with banking services can help you to make informed decisions and avoid unnecessary fees. Below we explain some of the most common types of fees and charges levied by Malaysian banks.

Types of Bank Fees

Account Maintenance Fees

Many banks in Malaysia charge a fee for maintaining your account. This is usually a fixed amount that is charged every month. Account maintenance fees vary based on the type of account you have. For example, savings accounts and current accounts are often charged different amounts for maintenance fees. The fee may also vary depending on the balance in your account. Accounts with higher balances often enjoy lower fees and some banks will waive account maintenance fees if you are able to maintain a minimum balance requirement.

Monthly Account Fees

Most banks in Malaysia charge a monthly fee for maintaining a business account. This fee can range from a few ringgits to several hundred ringgits, depending on the account type and the bank. Some banks offer free business accounts with no monthly fee, but these accounts may have limitations or restrictions on the number of transactions you can make.

Transaction Fees

Another common bank charge in Malaysia is a transaction fee. This fee is charged on certain transactions such as cash withdrawals or transfers. For example, cash withdrawals made at ATMs not owned by your bank often result in two additional fees: one charged by your bank and the other by the ATM operator. Transfers made to other banks may also incur fees. These types of fees will typically vary depending on the amount transferred and the frequency of such transfers and will be either charged as a flat rate or as a percentage of the transaction amount.

Transaction fees can add up over time. Some banks offer business accounts with unlimited transactions for a monthly fee. These types of accounts can be an especially cost-effective option for businesses that make a high number of transactions.

Cash Deposit Fees

When depositing cash into your business account, you may incur a cash deposit fee. This is usually a percentage of the deposit amount and can vary depending on the bank and the amount being deposited. Some banks offer free cash deposits for a certain amount each month, while others may charge a fee for all deposits.

Overdraft Fees

An overdraft fee is imposed when you withdraw more money than you have available in your account. This fee is charged to cover the costs of lending you the extra money and can be charged as a flat rate or a percentage of the overdraft amount. Overdraft fees can be quite expensive, so it is important to keep a close eye on your account balance to avoid incurring them.

Late Payment Fees

Loan or credit card payments may incur a late payment fee if you fail to make your payment on time. These fees can be substantial and negatively impact your credit score. Keep track of due dates and make payments on time to avoid them.

Handling Fees

These are charged for certain services like check processing or wire transfers. These fees can vary depending on the type of service you are using, so it is important to check with your bank to determine the exact fees involved when using specific services.

Foreign Exchange Fees

If you exchange currency or make a transaction in a foreign currency, you may be charged a foreign exchange fee by your bank. The amount charged will typically be dependent on the type of currency you are exchanging, the amount of the transaction, and the bank you are using. Some banks offer accounts that allow you to make transactions using multiple currencies for a monthly fee. This is a cost-effective option for businesses that frequently make transactions using foreign currencies.

Early Termination Fees

If you close your business account before the end of the agreed-upon term, you may incur an early termination fee. This fee can be a percentage of the account balance or a flat rate. Depending on your account balance and the terms of your contract this fee can be quite substantial. Carefully consider the terms offered by the bank before opening an account to ensure that you can commit to the required time frame.

Other Fees

There are a variety of other fees that may be imposed by banks in Malaysia for example, account closure fees, or returned check fees. Check with your bank before making new transaction types to make sure you understand all associated fees.

Tips for Avoiding Unnecessary Bank Charges

• Compare fees: Before choosing a bank in Malaysia, compare the fees associated with different banks and accounts. Look for banks that offer low or no maintenance fees, low transaction fees, and favorable overdraft policies.
• Use online banking: Online banking is a convenient way to manage your finances. It can also help you avoid bank charges. For example, many banks in Malaysia offer free online transfers, which can save you money on transaction fees.
• Monitor your account: Keeping a close eye on your account balance can help you avoid overdraft fees and other charges. You can do this by regularly checking your account online, or by setting up account alerts to notify you when your balance is low.
• Keep payments up to date: Be aware of the deadlines for various financial obligations and make sure that they are paid on time.

As a business owner, it is important to understand the various bank charges that you may incur when using banking services in Malaysia. These charges can include monthly account fees, transaction fees, and cash deposit fees, among others. Understanding these charges can help you to make informed decisions about which bank and which account type is best for your business and help you to manage expenses.

By carefully considering your banking needs and carefully reviewing the terms of each account, you can find a bank and account type that is cost-effective for your business, minimizes your banking fees, and allows you to maximize your financial resources.