Complete Guide to Business Current Account
16 Sep 2022
Table of Content
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What Is A Current Account And How Does It Work?
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Why Is A Current Account Important For Any Business?
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Advantages Of Current Accounts For Business
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How To Choose The Right Account For Your Business?
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What Do You Need To Do To Open A Current Account For Business?
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Open your Current Account with Bank of Baroda
When you start a business, you have to set up several things. You might need to rent an office space, a shop, or set up your factory. You also need to open a bank account to manage your business transactions. However, a basic savings account may not suffice. You need an account that enables unlimited transactions, i.e., a Current Account. This article explains what a Current Account is, why it is essential for your business and the many advantages of Current Accounts.
What Is A Current Account And How Does It Work?
A Current Account is a bank account that enables business owners and entrepreneurs to manage their business transactions. As a business owner, you may need to deposit and withdraw money frequently to manage your business’ cash flow. Since a Savings Account comes with limits on withdrawals, you need a different account that enables these transactions. An account that provides this facility is known as business bank account or a Current Account.
Banks allow you to make high-amount, high-value transactions with Current Accounts without restrictions. However, since this account offers fluidity, it is a non-interest-generating account.
Why Is A Current Account Important For Any Business?
As a business owner, you cannot be bothered by restrictions on cash flow. You need to be able to deposit and withdraw money freely, without any transaction limits. You also do not want to be weighed down by how much money you can withdraw, deposit, send to, or receive from your clients. Moreover, you should be able to conduct these transactions from any bank branch near you.
To keep your business smooth-sailing, you may also need to borrow money from the bank from time to time, i.e., you may need access to credit lines, overdraft facilities, bank guarantee letters, etc. You can enjoy these facilities as a business bank account holder.
Advantages Of Current Accounts For Business
Whether you wish to open a Current Account for a small business or an established one, there are several benefits of Current Accounts. They include the following.
• You can easily move money between accounts
With Current Accounts, you can move your money easily without worrying about transaction limits. You can perform unlimited transactions of whatever amounts you please at any frequency you deem appropriate. As such, you get complete control of fluidity for funds to run your business operations smoothly.
• You can manage personal and business assets separately
Opening a business current account allows you to keep your personal and business assets separate or disjoined from one another. You can easily track your cash inflows and plan your budgets and expenses for your business expenses separately. Doing so also allows you to interpret your financial records separately, which proves incredibly useful during tax filing season.
• You get access to Pan-India transaction facilities
Another critical benefit of Current Accounts is that you are not tied to deposits and withdrawals at your home branch. You can conduct transactions from any branch of your bank across the country. You can also conduct effortless online transactions via facilities like NEFT, IMPS, and RTGS, which allow you to send and receive funds in real-time within minutes.
• You can customise Current Accounts based on your business needs
Most banks offer different types of current accounts based on your business size, type, and needs. For instance, new entrepreneurs and small business owners can open the best current account for small businesses, as can multi-national corporations, trusts, educational institutions, and charitable organisations. The charges associated with handling these different accounts also vary. Thus, you can choose accounts with lower or higher maintenance fees, per your preference.
• You can get monthly cheque allowances
With Savings Accounts, banks typically provide one cheque book per year and charge you extra if you need a new cheque book. However, if you open a business bank account, you get a separate cheque balance or monthly allowance of cheques at no extra cost. This facility allows you to make hassle-free vendor payments.
How To Choose The Right Account For Your Business?
With increased competition in the banking sector, choosing the best business bank account can be pretty overwhelming. Here are some helpful tips.
- Open an account at a bank branch close to your office space or business location to get easy access anytime.
- Do your research and due diligence about the type of business current account suited to your requirements and the additional facilities offered by the bank.
- You must also check the overdraft facilities and limits offered with your current account and the bank’s ability to arrange the funds when required at a moment’s notice.
- You should ascertain the minimum balance requirements of the bank since most banks (especially in the private sector) demand higher minimum balances.
- You must check the personalised services offered, such as dedicated relationship managers, easy communication lines, etc., before opening a current account.
What Do You Need To Do To Open A Current Account For Business?
The standard procedure to open a current account is the same as any other account. You typically need to fill out an account opening form and submit your personal and business-specific documents. You must also complete the Know Your Client or KYC-compliance formality. The bank evaluates your documents and completes the account opening process. Post-evaluation, the bank sends you your account details, including cheque book, internet banking credentials, debit card, etc. Some banks also allow you to open business current accounts online.
Open your Current Account with Bank of Baroda
At Bank of Baroda, we offer the best business bank accounts customised to your needs. As one of India’s leading and highly reputed public sector banks, we offer an array of services, including the facility to open business current accounts online to ensure you enjoy a seamless and effortless banking experience. Contact us on our toll-free number 1800 5700 or visit your nearest Bank of Baroda branch for more details.
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