Setting up a current account is one of the most important tasks you simply cannot skip while starting your business. It is very crucial for you to keep your business banking operations separate from your personal banking.
Having a current account for your business helps you keep track of all your expenditure while simplifying your taxation process.
What is a current account
A current account is opened by businessmen, entrepreneurs, and more, who have to make a large number of transactions regularly.
Since the volume of transactions, as well as the amount per transaction are generally high, no interest can be availed upon the balance. But, a current account helps with deposits, withdrawals, and contra transactions.
You can open a current account in any commercial bank.
Advantages of having a current account
The whole purpose of a current account is to facilitate entrepreneurs and businessmen to carry out their transactions seamlessly, on a day-to-day basis.
Here are some advantages you could get by having a current account for your business.
#1 Current account = any number of transactions
One of the most important advantages of having a current account for your business is that there is no constraint on the number of transactions. You can transact any number of times at whatever frequency you need to.
Plus, the upper limit for transactions is so high that you don’t have to worry about money movement at all! This enables your business to have maximum fluidity in terms of operations.
#2 Keep your personal assets from your business
It is of the utmost importance to keep your personal and business assets disjoined. It is always recommended you have a current account so you can track your cash inflow easily. This gives you a superior way of planning and managing your budgets. You also get a roundup on your expenditure.
Having a clean financial record allows you to organise your data, which can come in handy for taxes and deductions. Great bookkeeping is always a bonus!
#3 Current account makes your operations easy
Delayed transactions can result in unwanted hiccups. A current account is just what you need to keep your business operations running like a well-oiled machine!
Your day-to-day transactions are carried out effortlessly and proficiently. Without any delays or jam-ups with your operations, you also get benefits like online banking. The speed of your transactions is usually high, which helps you maintain a good rapport with your vendors and customers!
#4 Current account translates to business legitimacy
Sure, we already talked about the importance of keeping your personal and business assets away from each other. But there is more. As a businessperson, you may write cheques or make online transfers to your vendors, partners, and more. It may seem unprofessional when you make payments from your personal account.
This is not entirely a deal breaker, but having a current account in the name of your business allows your payees to feel affirmed about you having a legitimate business.
#5 Reap extra benefits from your current account
Your current account has all sorts of other benefits that you would typically get from your savings account. Based on your business, your bank will offer you free Demand Drafts, NEFT and RTGS transactions, Pay Orders, and more, other than the unlimited withdrawals and deposits you can make with your current account.
Now that we have talked about nearly everything current accounts can help you with, let us break it to you. There is a whole lot more you can get with current accounts.