{"id":21853,"date":"2023-06-20T12:03:36","date_gmt":"2023-06-20T06:33:36","guid":{"rendered":"https:\/\/open.money\/blog\/?p=21853"},"modified":"2024-06-06T18:11:35","modified_gmt":"2024-06-06T12:41:35","slug":"best-current-account-for-your-business","status":"publish","type":"post","link":"https:\/\/open.money\/blog\/best-current-account-for-your-business\/","title":{"rendered":"7 Features to Choose the Best Current Account for Your Business"},"content":{"rendered":"

So you\u2019ve decided to open a current account for your business.<\/span><\/p>\n

Perhaps you want to open a second one for your cash inflow, or a new account altogether, to streamline your business transactions. Or maybe you\u2019ve chosen a dedicated current account to build your credit score and avail a loan eventually.<\/span><\/p>\n

Whatever be your reason for opening a current account, there are several factors you should consider before you choose the best one for your needs.<\/span><\/p>\n

Let\u2019s explore them in this blog, and look at how to arrive at an informed decision on the current account – <\/span>one of the most important aspects of running a business<\/b>.
\n<\/span><\/p>\n

Current Account: The Control Centre\u00a0of Your Business Finances<\/strong><\/h2>\n

As an important financial tool, a <\/span>current account<\/span><\/a> is a critical part of your business, regardless of its size or industry. It helps you track your income and expenses and monitor your cash flow, so that you can make strategic decisions. Moreover, having a dedicated current account is a mark of professionalism for your business, and demonstrates that you are serious and committed to its operations.<\/span><\/p>\n

\"Benefits<\/p>\n


\n7 Features To Evaluate Current Accounts<\/strong><\/h2>\n

With the range of account offerings by the many banks in the country, it is important to evaluate them according to clearly defined parameters like monthly account balance, overdraft facilities, interest rates or additional benefits and services. Depending on the nature of your business, your cash flow patterns or your credit requirements, you might want to prioritise one feature over the other.<\/span><\/p>\n

For example, for a business with irregular or seasonal cash flow, a low-balance <\/span>current account<\/span><\/a> becomes important as it saves the business from penalties or fees during lean months. On the other hand, for high-volume businesses like retail, where a significant part of the sales may be in cash, charges and fees levied on cash and non-cash transactions, or bank deposit fees might become a key deciding factor.<\/span><\/p>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n\n
Feature<\/b><\/td>\nWhat to look for<\/b><\/td>\nPoints to consider<\/b><\/td>\n<\/tr>\n
MAB\/QAB to be maintained:<\/span><\/p>\n

The monthly or quarterly average balance of a current account is the minimum amount to be maintained over a period of time.<\/span><\/td>\n

Some businesses prefer an account with a higher MAB\/QAB for the benefits that come with these accounts, like special cards, free transactions, or higher interest rates.<\/span><\/td>\nPenalties for non-maintenance, especially during lean months<\/span><\/td>\n<\/tr>\n
Rate of Interest:<\/span><\/p>\n

The returns that a bank might offer on your balance<\/span><\/td>\n

If your business cash flow pattern allows for a higher balance, you might want to consider a current account that yields a higher rate of return.<\/span><\/td>\nLower interest rates compared to other account types<\/span><\/td>\n<\/tr>\n
Overdraft Facility:<\/span><\/p>\n

An overdraft facility in a current account allows you to withdraw even if your account balance is zero, depending on your current account value, repayment history, credit score, etc.<\/span><\/td>\n

An overdraft facility can prove to be beneficial during a sudden or unplanned financial situation.<\/span><\/td>\nHigh-interest rates on overdrafts<\/span><\/td>\n<\/tr>\n
Connected Banking:<\/span><\/p>\n

The ability to connect your current account with your business and accounting tools or ERP software so that you can pay, collect payments, or reconcile transactions with real-time data updates.<\/span><\/td>\n

Connected banking makes setting up single or bulk payouts, adding beneficiaries, collecting payments, and linking all money movement with accounting and tax compliances easier and more seamless, reducing manual errors.<\/span><\/td>\nCharges for connected banking services, or use of third-party software, and accounting integration<\/span><\/td>\n<\/tr>\n
Transaction Limit:<\/span><\/p>\n

Most current accounts have no limit on the maximum number of transactions, although some premium accounts levy charges for transactions beyond a point<\/span><\/td>\n

If your business has high transaction volumes or frequent transactions, you should pay attention to any limits or charges associated with the account.<\/span><\/td>\nAdditional charges for exceeding transaction limits<\/span><\/td>\n<\/tr>\n
Cards and Expense Management:<\/span><\/p>\n

Availability of debit\/credit cards and access to third-party expense management tools.<\/span><\/td>\n

Depending on the kind of current account, banks offer debit and credit cards with limits for ATM withdrawal or shopping. Some banks also offer access to expense management tools to review or approve payments, or submit receipts.<\/span><\/td>\nHidden fees or charges for debit\/credit cards or expense management tools<\/span><\/td>\n<\/tr>\n
Additional Benefits<\/span><\/td>\nLook for any additional benefits offered, such as cashback rewards, loyalty points, or discounted services.<\/span><\/td>\nLimited availability of benefits or rewards, or benefits against requirements like MAB\/QAB etc.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\"Our<\/p>\n


\nHow to Open a Current Account<\/strong><\/h2>\n

While some banks allow business owners to instantly open a current account online via video KYC, the process may take a while for others.<\/span><\/p>\n\n\n\n
\ud83d\udca1Did you know?<\/b><\/p>\n

You can open an Axis Current Account in a fully digital process via OPEN. Not just Axis Bank, if you wish to open a Yes or ICICI bank account, OPEN can make it super easy for you. You can complete the account opening process 100% from the comfort of your home, office, or chosen location.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n


\n<\/span>Verification of documents is core to opening a current account.<\/span><\/p>\n

KYC documents for individuals and sole proprietors:<\/b><\/p>\n