Businesses of all types mostly rely on current accounts to carry on their daily activities. The world today is more inclined towards digital payments, rather than using cash at every step. This is actually the reason why more people are now choosing to open an account with digital banks like MoneyLion, Chime or Bank DIB. In fact, the total number of savings and current accounts in Indian banks had reached a whopping figure of 157.1 crore in March 2017, according to a report released by The World Bank.
This shows that the country is becoming increasingly financially literate and knows the importance of separating personal transactionsfrom official ones. The benefits and features of a current account are different from that of a savings account. Here’s a look.
There are no limits on the number of transactions and withdrawals you can make. In fact, one of the most useful features is that banks do not levy any extra charges for banking at non-home branches. You can carry on transactions as many times in a day as your business demands.
Complimentary GPS-enabled doorstep banking,interest on current account balance, 24 hours phone banking, free fund transfer across IMPS/RTGS/NEFT, free account statements and mobile alerts are added benefits of an online current account. In fact, many banks offer free Demand Draft issuance and outstation cheque collection to suit various business requirements. You can directly transfer funds to vendors and suppliers and operate the account online from the comfort of your office. Lastly, current accounts can be zero balance accounts, which means you do not have to maintain a minimum balance all the time.
A current account offers a professional edge, which businesses need to prove their credibility. All the cheques and demand drafts you issue for creditors will be done through a separate account. This will lend a sense of seriousness and create a great impression among your partners and associates. In fact, you can systematically manage your business account without having to confuse it with personal finances.
You can opt for overdraft facilities in case of delays in business payments. To bridge the gap between cash inflow and outflow, banks let you overdraw an amount temporarily. This helps you overcome any financial stress and carry on the business activities smoothly. This is a great feature that is ideal for times when fundsare short. You will have to check with your bank to know if they levy interest on the amount or not.
Keeps Your Funds Organised
Running a business becomes seamless with a current account. There is clear segregation between individual and official expenses. This helps in planning your finances well and gives you an idea of the overall income and spending. In case you mix your personal transactions with business ones, it becomes difficult to keep the official records clean. You might not even be able to recognise if your business is running at a profit or loss.
With a current account, you can carry on business transactions from any city. All you have to do is use the branch in that particular place to deposit or withdraw cash.
Before opening a current account, make sure to check the various fees and documents required to be prepared beforehand.