If you have recently started a business of your own, chances are that you are frequently being told that you need to get a current account, which begs the question: how can a current account help your business? To understand that, it is necessary to comprehend what a current account is and how it differs from your regular, personal bank account.
What is a current account?
A current account is a bank account generally used by businesses for day-to-day transactions because it is more suitable for their unique needs than a savings account. Current accounts are used for other purposes, such as salary payments and bulk payouts to vendors. Opening a current account provides businesses with a certain level of legitimacy, better organisation of business finances, and a higher chance of successfully raising capital in the future.
Top current account features to stay on top of business finances
OPEN provides your business with the financial clarity it needs through insightful reports like Cashflow, Profit-Loss, and many others. The cherry on top? You can connect all your bank accounts to the same dashboard and get a bird’s eye view of your cashflow.
Top Features of Current Account
Here are some of the top features of a current account. Let’s have a look.
Obtain access immediately
Customers have instant access to their funds 24/7, allowing them to make payments, deposits, or withdrawals whenever they need.
An overdraft facility is available
Overdraft facilities are available on current accounts to allow customers to withdraw more money than they have on hand.
Using direct debits/standing orders
To make regular payments from current accounts, customers can set up direct debits or standing orders.
The majority of current accounts these days offer the convenience of online banking, enabling customers to check balance, view transactions, make payments and transfer money from anywhere in the world.
Numerous banks nowadays provide mobile banking services, giving their clients the ability to pay bills and keep track of their accounts while out and about.
Certain banks provide customers with multi-currency accounts, which allow them to possess various currencies in a single account and transfer between them as needed.
Interest on Credit Balances
A few current accounts may provide a small sum of interest on positive account balances, although the amount is often negligible.
Many banks offer reduced fees or even free banking to current account customers, depending on their individual circumstances.
It does not stop there. When you get a current account with OPEN, you also get automatic access to many cool features that can help you manage your business banking and finances much better. Among many other features, you get
- Powerful expense management suite with VISA-powered Expense and Virtual Cards
- Automated reconciliation of all business transactions and integration with your existing accounting systems,
- Unified tax solution for direct and quick GST and TDS tax payments, along with challan history and management, and
- Payroll solution with salary disbursement, leave management, & 100% statuary compliance.
Benefits of having a current account with OPEN
The benefits of opening a current account are numerous, ranging from streamlining your business finances to granting legitimacy to your financial operations.
No balance? A current account is cool about it.
At times, you may find yourself waiting for a bunch of payments due at the end of a month, even as you need to pay your vendors right on time. Expectedly enough, that leaves you in a lurch, and a regular bank account wouldn’t be much of a help. On the other hand, a current account can come to your rescue with its overdraft facility.
An overdraft, essentially, is an amount you can withdraw from your current account even when you have no balance in it. Think of it as a small line of credit extended to your business by the bank to help you meet your working capital needs. Depending upon your transaction history, the bank you are associated with, and your rapport with that particular bank, you will be charged interest (or, in some cases, no interest at all!) on the overdraft.
At the end of the day the overdraft facility is one of the benefits of current account that help your business stay afloat even on rainy days.
Unlimited cheques to match your unlimited growth
You must already be used to getting a chequebook with your personal/savings account that you use to write cheques for various purchases. When you run out of cheques, you need to revisit the bank to get another chequebook, and some banks may charge you if you get chequebooks quite frequently.
In the case of a current account, you will face no such problems. You get plenty of cheques with current accounts from any bank, and every month (in the case of most banks), you can get a chequebook issued for your account so that you can keep making payments without any worries.
The frequency and size of the transaction are never an issue
A common sign of a healthy business is a high transaction frequency (though, of course, there are many exceptions to that general rule) and, as a business owner, a fixed limit on the number of deposits and withdrawals you can make from your bank account can be quite irksome.
Savings accounts generally have such a limit and therefore are unsuitable for most businesses. In addition, they also have a limit on the size of an individual as well as per-day transactions, which means that a company will not be able to make or receive amounts above a specific arbitrary limit that does not make any exceptions.
Current accounts are a lifesaver for businesses primarily because of the absence of such limits. With a current account, a firm can make any number of transactions and pay or receive any amount of money—something that proves to be of great value as a business scales up and finds itself handling increasingly large sums of money.
Legitimacy translates into easy credit
As discussed earlier, having a current account imparts legitimacy to a business, which is a game changer when raising funds to accelerate business growth.
By analysing the statements of your current account from the past, a financial institution can evaluate your business’s health and future potential based on parameters like transaction history, debt repayment, etc.
Helping businesses easily score credit is one of the most important, yet often overlooked, benefits of current account.
Apart from these major benefits of current account for business, neobanks such as Open sweeten the pot further with added perks. For example, with Open’s Current Account, you can:
Initiate your application process in seconds
Your time is precious and best spent focussing on business growth, not commuting to banks, waiting in queues, and going through cumbersome processes.
Get started immediately
Waiting is boring, and we get it. So you can immediately add beneficiaries to your current account and start collecting and sending payments right off the bat with your Open account. For businesses that need to pay vendors frequently, this is among the major benefits of current account.
Say goodbye to tedious accounting chores
All your transactions are auto-reconciled at your OPEN dashboard, saving you hours in manual reconciliation. You also get a complete overview of your Payables & Receivables.
To achieve your dreams of phenomenal growth with our current account, you can also apply for term loans up to 30L at attractive interest rates and minimal paperwork. So, get a current account pronto and ensure that you get the best in business out there!
For your reference, here are some of the most popular FAQs about current accounts.
Current Account FAQs
Q: What is the difference between a Current Account and a Savings Account?
A: These are some of the most important distinctions between a Current Account and a Savings Account:
|Category||Current Account||Savings Account|
|Objective||Continual and frequent transactions||Promote saving habits|
|Applicability||Business owners and enterprises||Everyone|
|Usage||Frequent transactions and withdrawals||Save and earn interest on a fixed rate|
|Transactional Limitations||Unlimited monthly transactions||Restricted monthly transactions|
Q: Who is eligible for a Current Account?
A: If you identify as any of the following, you can get a Current Account.
–> Resident Individual
–> Sole Proprietorship Firms
–> Partnership Firms
–> Limited Liability Partnership Firms
–> Private and Public Limited Companies
Q: What documents are needed for a Current Account?
A: For most of the Current Account providers in India, you will need the following documents.
–> Address proof
–> Identity proof
–> Business registration proof or incorporation certificate
–> Business PAN
–> Latest passport size photographs
–> Account opening cheque from an existing bank account