Here in this blog, we talk about choosing the right bank account for your business if you are trying to understand what best fits your business or you wish to know what features of bank account such as interest rates, fixed deposits, etc. you must have. It could also assist if you are planning to switch from your exiting current account.

Being a business owner, at times you tend to become confused when it comes to choosing the right current account for your business. Also, having a current bank account is an important pre-requisite in running a business.

Opening a current account comes with a package of various benefits to run a business successfully. Moreover, a few banks allow an unlimited number of transactions on your account i.e. there’s no monthly restriction. This further promotes the benefits of having a separate current account apart from your normal savings bank account.

Understanding Current Account

In India, there are several types of accounts for depositing your funds in the banks. One of the most common types of account is the Current Account. The current bank account is used by individuals having a high number of banking transactions. A Current Account is particularly for business transactions. This account isn’t for saving or investment purposes. With this account, customers won’t receive any interest. This Account is used for day to day banking transactions making it easier for the account holder to go about his business. There aren’t restrictions on some of the transactions like a savings bank account. Banks generally would collect maintenance charges as service fees. The amount in these current accounts could be deposited and withdrawn any time without providing any prior notice. It’s also suitable for making the payments to creditors with the help of cheques.

Current Account – Advantages

  • Having a current account enhances your creditworthiness and demonstrates that you’re seriousness in shepherding business transactions.
  • There’s no restriction on the deposit made in a current account.
  • Additional overdraft facility assists businessmen to perform a smooth operation for their businesses.
  • Current account helps the business owners in making direct payment to creditors by issuing demand draft and cheques without any delay.
  • One could get value added services like multi-location fund transfer, free pay order, free inward remittance and free demand draft services.
  • Some of the banks also provide dedicated customer support and personalized services.

Things to look for in a Current Account

  • Nearby Branch: You should choose a branch nearby to your business location or office space. This allows easy access of the branch in case any need arises.
  • Proper Research: You should perform thorough research and due diligence before choosing a particular current bank account. You should also read all terms and conditions and clarify your doubts with the bank before applying for the same.
  • Over Draft Limit: You should also check the overdraft limit which is offered by the bank along with its ability in arranging for an overdraft facility with an agreed limit.
  • Personalized Services: Personalized services and ease in banking transaction are some more factors one must look at. In case cost isn’t a concern, you must select a bank that offers premium services for the businesses.
  • Minimum Average Monthly Balance: It is one of the most crucial factors while choosing the bank for opening a current account. Initially, any business owner would wish to go for a zero or less minimum balance accounts for carrying on their business freely.

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June 2021