Why Your Business Needs a Separate Current Account

Posted on Thursday, October 24th, 2024 | By IndusInd Bank

Are you still managing your business finances through a personal account? While it might seem convenient, it could lead to several consequences for your business over time. For instance, mixing personal and business transactions can make it difficult to track your expenses accurately, complicate tax filings, and create confusion when analyzing your business’ financial health. Also, using a personal account for business transactions can impact how clients, suppliers, and even lenders perceive your professional credibility.

These consequences highlight why having a separate current account for your business is not just beneficial but essential. Read more reasons to understand why a current account is a smart investment for your business’ financial health and growth.

Financial Clarity and Organization

Opening a current account online is simple and yet the benefits it provides are tremendous. For starters, it helps maintain a clear distinction between business and personal finances. This separation is crucial for tracking income, expenses, and profits accurately. When personal and business funds are mixed, it can become challenging to track expenses, monitor cash flow, and manage accounts accurately. 

With a separate account, you can easily monitor your cash flow, identify profitable months, and recognise when business expenses are getting out of hand. This clarity is vital for making informed decisions, whether it’s budgeting, cutting costs, or planning for expansion.

Access to the Overdraft Facility

Every business experiences fluctuations in cash flow. Whether it’s a delay in payments from clients, unplanned expenses, or emergencies, cash flow gaps can severely impact operations. An overdraft facility in a current account offers a necessary financial cushion during difficult times. This facility allows you to withdraw more than the available balance, acting as a short-term loan that can be paid back in a defined tenure.

Interest on Surplus Funds through Auto-Sweep Facility

Current accounts are highly liquid and are designed to handle a high volume of transactions. Thus, they do not offer any interest. However, with Indus Premier Business Current Account, there’s a way to earn interest on surplus funds through the auto-sweep facility.

For example, if a threshold of ₹20,000 is set, any amount above this will automatically be transferred to linked fixed deposits, where it can earn returns. This way, your unused funds do not sit idle but instead generate interest.

If you fall short of funds for a transaction, the system intelligently breaks the fixed deposits and sweeps the necessary amount back into the account. This process is seamless and incurs no penalties.

Look at the additional benefits of Indus Premier Business Current Account:

Open a current account online and get started with IndusInd Bank today!

Access to Business Loans

You may need a business loan for various reasons, such as expanding operations, purchasing inventory, or enhancing cash flow.

Having a current account is often a pre-requisite to apply for a business loan. This dedicated account provides a clear and organised record of your business’ cash flow, which is crucial for evaluating loan eligibility. By demonstrating consistent and healthy financial activity through a current account, your business can build credibility and improve its chances of securing a quick business loan online.

Higher Transactional Limits

Businesses often require higher transactional limits to process bulk payments, disburse salaries, and deal with suppliers. A current account is specifically designed to handle the large volume and high-value transactions typical of business operations. This flexibility is non-negotiable for businesses to ensure that their daily operations are not interrupted by financial limitations.

Additional Value-Added Services

Beyond the benefits outlined above, current accounts offer additional value-added services that enhance the banking experience and add tangible value to your business operations. These services may include:

• Secure and feature-rich mobile banking app
• Cash management services
• Free cash deposit facility
• Reliable customer support via phone, email, and chat
• Doorstep banking services for pick-up/delivery of cheques and cash
• Specialised loan products tailored to your business requirements

Also Read: How to Link My Online Current Account with Google Pay?

Key Takeaways

A current account benefits you in multiple ways. You get access to an overdraft facility to manage difficult times, business loans for expansion, interest on surplus funds through auto-sweep deposits, higher transactional limits, and various additional services. Whether you are a small business owner or running a large enterprise, opening a separate current account is a step towards financial discipline, credibility, and sustainable growth.

Consider opening an  Indus Premier Business Current Account by IndusInd Bank for your business. Enjoy all the benefits listed above, plus a 100% digital account opening process, account grouping features, dynamic cash deposit limits, and free cash withdrawals.

Apply NOW!

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.