What is the purpose of a current account?

What is the purpose of a current account?

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In India, businesses are usually seen to have current accounts with their banks. A current account is a banking account meant for businesses as opposed to a savings account, which is mostly used by individuals for their banking needs.

Know the purpose behind opening a current account

What really is the purpose of a current account? The purpose is simply to help businesses in facilitating their service needs. As opposed to any individual with a savings account, businesses have a much larger need. They not only have to carry out greater number of transactions, but also they deal with a very high amount of monetary value. Such transactions if done through a normal savings account may incur quit a few charges. But a current account does exactly these things and enables businesses to conduct their transactions of both high value and volume without any extra charges.

What does a current account have to offer?

A current account offers businesses lucrative deals and helps them to facilitate their financial transactions with great ease. It is ideal for higher number of transactions and can also be customized as per your specific requirements. This is great as it helps in the compartmentalization of personal and corporate banking. This makes planning and preparing your financial plan easier, now that all your business transactions are separate and all at one place.

The best part of opening a current account in recent times is the fact that you do not have to visit the bank most of the time. You can simply get everything done through your mobile phone or a computer, even open an online current account easily.Banks also treat these accounts with utmost care and ensure that you do not face any difficulty in your banking journey with them.

While using a current account, your cheques and drafts bear the name of your business. This helps in increasing your brand value and adds to the visibility of your business. It looks professional and authentic.

There may inevitably come a time when you will look to grow your business and need loans. A bad credit score in such a case may not be helpful. Your current account depicting correct financial flows may help in having a satisfactory credit score and determine your creditworthiness. A healthy and sound current account statement can help you get loans and improve your credit score, provided you repay these loans in a timely manner.

Many banks offer free of cost folio charges, free demand draft facilities, lucrative overdraft facilities, significant number of free cheque books, waivers for many other services. After this amount of free cheques and demand draft is met, you may need to pay nominal fees to back extra quantities of these.

If you thought that the list of services was over, then you’re wrong. For current accounts, banks provide a host of other services. There are varied benefits and value-based services associated with a current account. They may provide free financial advisory services, ease in foreign trading, specialForex rates, etc. You may contact your respective bank to know more about the services and facilities available.

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