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Why Every Business Needs an Online Current Account: Essential Reasons and Benefits?
Posted on Thursday, August 22nd, 2024 | By IndusInd Bank
You need to consider many things while running a business like daily operational expenses and monthly salaries for your staff, all of which can be easily managed with a Current Account. It is imperative that you make the best of the Benefits of Current Accounts by opening one, especially if you are in a growth or expansion mode.
This blog explains why opening a Current Account Opening is important for your business and its benefits.
What is a Current Account?
A Current Account is an account which is opened for the use of a business for all its transactions. It helps the owner of the business to understand and improve upon their cash flow and expenses and to estimate and provision for their tax liabilities. A Current Account is used for all kinds of business-related deposits and withdrawals – cash, cheques, transfers, NEFT, RTGS, issuance of DDs, foreign remittances, tax payments and so on. The number of transactions in a Current Account is normally very high. All commercial and scheduled banks in India offer customers the facilities and benefits of Current Account. However, Current Account benefits do not include any interest accrual on the accounts’ credit balances. There are several types of Current Accounts, and you may choose one based on the unique needs of your business.
Also Read: How Many Types of Current Accounts are There in Banks?
Advantages of a Current Account
You have understood the necessity of Current Account opening for businesses. Now let us look at the benefits of using a Current Account.
- Unlimited Transactions:
Current accounts come with higher transaction limits – both from the point of view of the volume and the value of transactions. As this account is opened for business purposes, the number of transactions as per your business is not viewed with suspicion. Your business retains a high level of flow of funds, which is useful for the day-to-day running of the business.
- Segregation of Funds:
A Current Account ensures that you keep your personal and business funds & transactions separate. A business is a distinct legal entity, and its transactions too can be kept distinct from that of its owner. Cash flow for the business is easy to track and analyse if you have a Current Account. It is easier for the business owner to prepare final accounts and get them audited, as the financial records are available from the Current Account.
As an example, if you have a side business of importing highly collectable stamps and selling them in India, it is advisable for you to make all your payments and route all your receipts through your Current Account.
- Smarter Insights:
As already mentioned, a Current Account ensures that all your financial records are available in one place, making it easy for you to prepare your accounts. Some banks provide their customers with different kinds of reports, helping them to analyse several facades of their business.
- The Fluidity of Operations:
As your Current Account is exclusively for your business, you may ensure that all your transactions are done timely and efficiently. This type of prompt settlement of accounts helps improve your relations and terms with your customers and suppliers.
- Provides Legitimacy:
Customers find it easier to trust and work with a business that provides its Current Account details.
- Additional Benefits: A Current Account provides you with all the banking facilities available – deposits and withdrawals – cash, cheques, transfers, NEFT, RTGS, issuance of DDs, foreign remittances, tax payments and other advanced facilities of Cash Management Services as your business expands.
Also Read: 5 Pointers to Consider when Opening a Current Account
Conclusion
Although opening a Current Account is not legally mandatory in India, it is advisable to do so now that you have read about the convenience and facilities available.
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.
