Finance Company vs Bank vs Licensed Moneylender in Singapore: What's the Difference?
Ask around, and you will find that many Singaporeans sort financial institutions into two boxes: banks and everything else. The ‘everything’ else box tends to hold both finance companies and licensed moneylenders, which is where the confusion starts. The two are governed by separate regulations, answer to separate authorities, and are permitted to do very different things with your money.
Banks, finance companies and licensed moneylenders each occupy a defined position in Singapore’s regulatory framework. Knowing which is which tells you where your deposits are protected, who is allowed to lend against what, and which institution is built for the kind of service you actually want.
What Is a Commercial Bank in Singapore?
A commercial bank is a full-service financial institution licensed and supervised by the Monetary Authority of Singapore (MAS) under the Banking Act. The banking licence is the broadest available in Singapore, which is why a bank can offer such a wide range of products:
- Current and savings accounts, foreign exchange and credit cards.
- Wealth management and investment platforms.
- Personal and mortgage loans.
- Corporate financing, including trade facilities and syndicated lending.
Breadth comes with scale, and scale shapes the experience:
- Credit assessment usually runs through standardised scoring models, so borrowers whose circumstances sit outside the model can find themselves declined without much discussion.
- Service is increasingly routed through apps, chatbots and call centres.
- Headline deposit rates often carry conditions such as salary crediting, minimum monthly card spend or the take-up of an insurance or investment product. This means that the advertised rate and the rate you earn are not always the same.
What Is a Licensed Finance Company in Singapore?
A finance company is a deposit-taking financial institution regulated by MAS under the Finance Companies Act. SingFinance is one of only three licensed finance companies operating in Singapore. Finance company regulations sit alongside those of banks, covering capital adequacy, liquidity and conduct of business under the same supervising authority.
What a finance company in Singapore offers:
- Eligible Singapore dollar deposits insured by the Singapore Deposit Insurance Corporation (SDIC) up to S$100,000 in aggregate per depositor per Scheme member, the same statutory protection that applies to bank deposits.
- Fixed deposits, savings accounts and current accounts.
- Commercial property, land and construction, equipment and machinery and motor dealership financing.
- Housing and car loans for individuals.
What we do not offer is equally defining:
- No foreign exchange dealing.
- No uncollateralised credit cards.
- No speculative investment products.
The narrower licence concentrates the business on deposits and secured lending, which is what allows the work to be done through people: assessment on the merits of the case, structuring around the borrower’s cash flow, and turnaround measured against the pace of the deal.
What Is a Licensed Moneylender in Singapore?
A licensed moneylender is a private lending business regulated under the Moneylenders Act by the Registry of Moneylenders, which sits under the Ministry of Law. According to the Moneylenders Act, a Licensed Moneylender must follow these rules:
- Interest capped at 4% per month.
- Administrative fee capped at 10% of the principal.
- Total charges on a loan cannot exceed the principal itself.
- Unsecured borrowing capped by the borrower’s income across all moneylenders combined.
- No deposit-taking, which means no savings accounts, no fixed deposits and no deposit insurance.
The comparison people usually reach for is moneylenders vs banks, and that framing leaves out the middle category entirely. Finance companies are supervised by MAS under a deposit-taking licence. Moneylenders operate under Ministry of Law rules written for a different market and a different kind of loan.
Key Differences: Bank vs Finance Company vs Licensed Moneylender
Commercial Bank | Licensed Finance Company | Licensed Moneylender | |
Primary regulator | MAS | MAS | Registry of Moneylenders (MinLaw) |
Governing legislation | Banking Act | Finance Companies Act | Moneylenders Act |
Accepts deposits | Yes | Yes | No |
SDIC insurance | Up to S$100,000 per depositor | Up to S$100,000 per depositor | Not applicable |
Core customers | Retail, wealth, corporate | Retail savers and SMEs | Individuals needing small, short-term loans |
Typical loans | Full range, secured and unsecured | Property, construction, equipment, motor, housing, car | Small-sum personal and emergency loans |
Service model | Largely digital and centralised | Relationship Managers, face-to-face | Branch or storefront, transactional |
On a finance company vs bank comparison, the deposit protection is identical and the supervising authority is the same. The difference shows up in scope and service.
Finance companies hold a narrower licence and a smaller book, which allows decisions to be made closer to the customer, and loans to be structured around a business rather than fitted to a template.
Why Choose a Licensed Finance Company Like SingFinance?
The choice facing most savers and SMEs is between the widest possible product range and a deposit-taking institution that carries the same protection, with decisions made closer to the customer. Sing Investments & Finance Limited has been operating under that second model since 1964, listed on the SGX Mainboard since 1983 and supervised by MAS throughout.
On deposits, our high-yield savings account, the GoSavers Account*, pays up to 1.30% p.a.** with no salary crediting, no minimum card spend and no bundled products to take up. Our Fixed Deposits suit money you can set aside for a defined tenure, and weighing a savings account against a fixed deposit is worth doing before you commit funds either way.
Businesses can hold operating cash in a corporate current account with us and work with the same Relationship Manager on financing, structured around how the business earns and spends across a year. There is a fuller picture of what SME financing in Singapore covers if you are weighing your options.
Open an Account or Speak to a Relationship Manager
If you have been treating banks as the only regulated place to keep your savings, a licensed finance company is worth a closer look. Compare our current deposit rates and open a GoSavers Account online through the SIF Mobile app with Singpass, or speak to our staff at any of our four branches about financing.
*Singapore dollar deposits with SingFinance are insured up to S$100,000 in aggregate per depositor by SDIC.
**Interest rates are subject to change. Always check the official SingFinance website for the latest prevailing rates.