{"id":21600,"date":"2023-02-24T19:53:34","date_gmt":"2023-02-24T14:23:34","guid":{"rendered":"https:\/\/open.money\/blog\/?p=21600"},"modified":"2023-07-05T13:22:19","modified_gmt":"2023-07-05T07:52:19","slug":"8-things-to-help-you-decide-the-best-current-account-for-your-business","status":"publish","type":"post","link":"https:\/\/open.money\/blog\/8-things-to-help-you-decide-the-best-current-account-for-your-business\/","title":{"rendered":"8 things to help you decide the Best Current Account for your business"},"content":{"rendered":"

India houses more than 63 million Small and Medium Enterprises (SMEs)<\/a> and is the largest employment provider in India. They contribute to 50 percent of the country’s exports. SMEs in India also employ 40% of India’s workforce. Therefore, SMEs are crucial cogs in the wheel that will contribute to making India a $5 trillion economy by 2025. Besides their contribution, SMEs need help to avert financial and regulatory challenges. This challenge starts from getting hands on the best current account for the business to foraging for financial aid and complying with multiple multi-tiered regulations at every stage of the growing business.\u00a0<\/span><\/p>\n

Here are a few daily challenges businesses face:<\/span><\/p>\n

    \n
  1. Increased Capital Crunch<\/span><\/li>\n
  2. High Transaction charges<\/span><\/li>\n
  3. Perceived as high-risk entities<\/span><\/li>\n
  4. Lack of understanding of the changing regulations<\/span><\/li>\n
  5. Low Employee retention<\/span><\/li>\n
  6. Low Client retention<\/span><\/li>\n
  7. Lack of tailor-made solutions<\/span><\/li>\n<\/ol>\n

    \u201cIf accounting is the brain, the current account can be considered the business’ heart.\u201d<\/span><\/p><\/blockquote>\n

    Looking closely at the SMEs’ challenges, one can see that it starts with a need for more funding. Most SMEs need help securing loans from banks as they do most of their business transactions with cash and need help managing an accounting system\u2014this issue of lack of appropriate systems snowballs into the abovementioned more significant problems. If accounting is the brain, the current account can be considered the business’ heart. All transactions have to go through the business current account. The brain and the body cannot function optimally without a healthy heart. <\/span><\/p>\n

    Before starting a business, choosing the best current account<\/strong><\/a> is imperative. With this blog, we will decipher how you can decide on the best current account for your business needs.\u00a0<\/span><\/p>\n

    What is a Current Account?<\/span><\/h2>\n

    A current account<\/strong> is a type of bank account primarily designed for businesses to facilitate their high volume of daily transactions, which are limited by a savings account. It serves various purposes, such as salary payments and large supplier payments. By opening a current account, businesses can establish their credibility, streamline their financial management, and increase their prospects of securing funding in the future.<\/span><\/p>\n

    Here are the key differences between a current account and a savings account, as follows:<\/span><\/p>\n\n\n\n\n\n\n\n\n\n
    Current Account<\/b><\/th>\nSavings Account<\/b><\/th>\n<\/tr>\n<\/thead>\n
    For daily transaction needs<\/span><\/td>\nIt comes with limited transactions<\/span><\/td>\n<\/tr>\n
    No-interest bearing deposit<\/span><\/td>\nEarn interest rate on savings<\/span><\/td>\n<\/tr>\n
    Overdraft facility<\/span><\/td>\nNo overdraft facility<\/span><\/td>\n<\/tr>\n
    High minimum balance requirement<\/span><\/td>\nLow minimum balance requirement<\/span><\/td>\n<\/tr>\n
    Best suited for business purposes<\/span><\/td>\nSuited for individuals<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    Types of Current Accounts in the Market<\/span><\/h2>\n

    Let’s dive deep into various types of current accounts in the offering.<\/span><\/p>\n

    Basic Current Account<\/span><\/h3>\n

    A simple current account lets you deposit and withdraw funds, settle bills, and conduct online transactions. Generally, it does not come with supplementary benefits such as an overdraft facility or interest earnings.<\/span><\/p>\n

    Business Current Account<\/span><\/h3>\n

    A business current account<\/strong> is a dedicated account for entrepreneurs. Its primary purpose is to handle cash flow, settle payments to suppliers and vendors, and monitor expenditures.<\/span><\/p>\n

    Premium Current Account<\/span><\/h3>\n

    A premium current account is specialized with extra advantages, such as better interest rates, insurance coverage, exclusive discounts, and more. They typically require a higher fee than regular accounts and a minimum monthly deposit. Premium current accounts cater to customers who desire more features from their accounts, including exclusive offers, priority services, and other perks.<\/span><\/p>\n

    Joint Current Account<\/span><\/h3>\n

    A joint current account is an account that two or more individuals jointly own. It is an effective means of managing finances together and settling bills collaboratively.<\/span><\/p>\n

    Offshore Current Account<\/span><\/h3>\n

    An offshore current account is a bank account in a foreign jurisdiction. While offshore accounts may provide tax benefits, they can also carry added risks and compliance requirements.<\/span><\/p>\n

    8 things to look for while choosing the best current account<\/span><\/h2>\n

    Each business has its own financial needs, and as we saw before that various current accounts will fulfill the requirements of diverse industries. Below is the list of what to look for in a current account while choosing one for yourself:<\/span><\/p>\n

      \n
    1. Balance Limit<\/span><\/li>\n
    2. Rate of Interest<\/span><\/li>\n
    3. Overdraft Facility<\/span><\/li>\n
    4. Digital Banking<\/span><\/li>\n
    5. IMPS\/RTGS\/NEFT Fund Transfer<\/span><\/li>\n
    6. Debit Cards<\/span><\/li>\n
    7. Charges<\/span><\/li>\n
    8. Additional Features<\/span><\/li>\n<\/ol>\n

       <\/p>\n