Practical matters of setting yourself up

When you move into a new place, you have a short period of time when you’re in between rental deposits; either you’re cashed up but you know it’s leaving you soon or you’re strapped for a big chunk of cash until your old real estate agent clears that last property. Normally, deposit in equals deposit out +/- a few bucks, depending on where you’re moving. Lady and I found that Singapore is a lot of extra bucks, and it’s not just deposits for rental agreements; there’s deposits for a lot of the basics.

Starting with the new home, yes we’re still renting, we read up that there would be big deposits, but it really hits home when the real estate agents walk you through what you need up front. Upon finding a place you want, you sign a letter of intent that you wish to be taken seriously and that you would like the landlord to take the property off the market. For that, you pay a deposit of 1mth’s rent, you pay it immediately and it is not refundable. If the colour of your money is not flashed then you’re not a credit worthy tenant. Once this is accepted, you pay another month’s rent for bond and one month rent up front. This is paid one week after the first letter of intent is signed. Payments are either cash, cheque or direct bank transfer.

Now bearing in mind that you won’t see the two months’ deposit until you leave the property at the end of your two year fixed term tenancy, that’s a lot of money to tie up. And we’re not talking low rents either, we were being shown three bed apartments starting at S$5,000 a month, which expects you to find at short notice a spare S$15k just lying around. That’s some culture change from credit to cash. Don’t ask about stamp duty, it’s not so big, but again, it’s up to the new tenant to pay stamp duty on their new rented property. Not sure I understand that.

Bank accounts are a similar beast. To prove you have sufficient credit and resources, all bank accounts require an initial deposit. Most are S$1,000, others are higher. POSB who we went with is a lenient S$500. That’s per account; so one for current account purposes, one for savings, one to hold your monthly tax (which you have to set aside yourself) and for us another savings account to take advantage of my employer’s savings scheme and suddenly we’re handing the bank S$2,000. For the pleasure of having a bank account to manage our money, we are lending the bank two grand (at an interest rate of less than 1%) and are not allowed to withdraw it until we close the account. Well, that’s not strictly true, we have a S$500 minimum balance which we can go below but are charged a penalty on it. Needless to say we’re rethinking how we manage the money! To own a chequebook, well don’t go there. As foreigners we would have had to pay S$3,000 as a deposit and retain a minimum balance of S$1,500, to ensure that we don’t write a bad cheque and run off without paying. Again, you’re funding the bank, for no benefit to yourself, until you close the account or pass away and leave it in your estate, presumably to cover the cost of your casket or urn.

Singapore is totally a cash based society, or rather the culture is cash based. You either have it and doors open or you don’t and nothing happens.

Utilities are the next step for us as we move into Chez Shovel. We’re excited to be paying for electricity and water services (gas we buy a calor gas bottle for S$30, no deposit paid!), telephone and cable TV. Whatever else we don’t know yet, but we’re waiting, cash ready and waiting!
Shovel