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Current Account
How to choose the best current account for your needs?
Being a business owner comes with several requirements, one of them being frequent and numerous banking transactions. Thus, having a current account is a prerequisite for running a successful business.
What is a current account?
A current account is an account meant for individuals with a high number of banking transactions. The current account does not give interest on its balance and hence, it is meant for business transactions. It will help you run your business conveniently.
There is no restriction on transactions on current accounts. You can deposit or withdraw money to or from the account at any time. This account is also suitable for making payments by cheque. A current account offers multiple benefits to business owners. In certain cases, banks allow current account holders an unlimited number of transactions, unlike savings bank accounts where the number of transactions is restricted. Thus, if you are a business owner, you must have a current account along with your Savings Account
How to select the type of current account?
Banks in India offer various types of current accounts that differ in the following parameters -
- Monthly/Quarterly balance commitment
- Limits on cash deposit
- Limit on cheque or DD issue
- Maintainance charges and transactional charges
In case of Axis Bank, you need to maintain a monthly average balance of ₹ 10,000 in a normal current account, with a free limit of ₹ 2,00,000 on cash deposits. You can avail of a higher version of current accounts like an advantage version or business privilege function to enjoy the benefits of higher limits, but on the other hand, you will have to maintain a higher monthly average balance (MAB).
You can select the type of current account based on your requirement of the cash deposit and DD issuance, along with your ability to maintain a monthly average balance. These will be based on the turnover of your business and your daily average number of transactions.
[Also Read: Difference Between Savings Account and Current Account]
There are other factors that you will need to consider before you decide to open a current account for your business with a bank -
- Branch access: The current account of your business should be in a bank branch that is close to your office. If you have to go to the bank for making transactions, it should not consume much of your time.
- Proper research: Before deciding on a bank to open a current account with, you need to do proper research about the bank.
- Overdraft limit: Most banks offer an overdraft limit on the current account. Select the one that is ready to give you an overdraft limit as per your requirement.
- Personalised services: Personalised services by the bank make business transactions easier. If it is not too expensive, try opening a current account with personalised services.
If you open a current account with a bank with a large network of branches like Axis bank, you may have several advantages in addition to easy branch access. Axis Bank provides its current account customers features like unlimited transactions and withdrawals. You can choose the type of account to open according to your needs.
Advantages of a current account:
- Increase in creditworthiness.
- Additional overdraft facility to smoothen your transactions.
- Direct payment to suppliers using cheques or demand drafts from the account.
- Online payment, internet banking and multi-location fund transfers.
- Dedicated customer support and personalised services like relationship managers.
So, if you are a business owner, open a current account based on your needs with a bank that you trust. It will help in running your business smoothly. You can also open current account for sol prop a digital current account.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or 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. Please consult your financial advisor before making any financial decision.
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