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Do’s and Don’ts of Getting a Current Account
Posted on Wednesday, March 6th, 2024 | By IndusInd Bank
Whether you’re a seasoned businessman or a budding startup owner, you would agree that you need a current account to manage your finances effectively. In simple terms, a current account serves as a financial hub for businesses, allowing seamless transactions, overdraft facilities, and other services. With a myriad of banks available to open current accounts online or offline, taking the right route may feel confusing. Making an informed decision can spell the difference between availing the benefits of current accounts and unnecessary hurdles. This is why you need to arm yourself with the right knowledge about the dos and don’ts of current accounts.
This isn’t merely about following rules but safeguarding your financial interests and maximising the potential of your business. Without further ado, let’s get into the details.
Do’s of Using a Current Account
1. Select a Current Account with No Minimum Balance Requirement
It is prudent to opt for a current account that does not mandate a minimum balance. While some types of current accounts may impose this condition, choosing one without such constraints ensures smoother operations without the need for constant balance monitoring.
2. Thoroughly Review and Understand the Terms Before Signing
When you open a current account online, you must review all terms and conditions outlined in the agreement before finalising the paperwork involved. You should do this for all types of current account. Take the time to read the fine print and clarify any doubts regarding hidden charges or contractual obligations, interest on current accounts, and similar others. Proceed with signing the documents only after you are fully informed and confident about the terms laid out.
Recommended Read: Does Your Small Business Require a Current Account?
Don’ts of Using a Current Account
1. Don’t Opt for Unnecessary Overdraft Protection
While overdraft protection can be beneficial in certain situations, it may not always be necessary for your business. This is why you should avoid signing up for overdraft protection or any additional services you don’t need. Instead, assess your business requirements carefully and opt only for services that align with your financial needs and goals.
2. Avoid Bouncing Cheques
Bouncing cheques can have negative repercussions on your credit score and business reputation. This is what makes it essential to maintain a sufficient balance in your current account to cover any cheque payments you make. If you opt for automatic payments through cheques, ensure that you regularly monitor your account balance to avoid the risk of bounced cheques and losing the advantages of your current account. This proactive approach can help you maintain a positive financial standing and avoid unnecessary penalties.
3. Track Your Spending
If your current account is linked to a debit card and has overdraft protection enabled, there’s a risk of overspending beyond your means. This is where you need to build a habit of monitoring your spending closely and ensure that you don’t exceed your financial limits. You can start by reviewing your transactions and expenses regularly to identify any unnecessary or frivolous spending. This is how you can avoid the pitfalls of overspending and maintain financial stability.
You can effectively manage your current accounts, streamline financial operations, and avoid common pitfalls by adhering to the dos and don’ts outlined in this guide. Click here to open a current account online.
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.
