Here’s Why You Should Have a Current Account

Denied for a bank account? Here's what you should know | Consumer Financial  Protection Bureau

Opening a current account is one of the vital tasks you must never ignore while starting a business. Creating a separate current account from your personal bank account helps you easily track all your business-linked expenses. Besides this, it also caters you with various current account benefits.

To know the current account benefits, read on.

  • Comes with overdraft facility

Overdraft facility permits withdrawal of cash over your current account balance. This benefit assists you to meet various business expenditures, pay your employee salaries timely, and mitigate other crucial necessities on time when your company is yet to receive the actual payment.

  • Permits unlimited transactions

The account caters a higher upper limit for bank transactions, which removes the requirement to fret over cashflow. Unlimited transactions can be performed of any frequency depending upon your need. As a result, a current account provides higher cash fluidity, which savings accounts can never provide.

  • Separate company transactions from your personal transactions

For availing tax benefits, it is important to separate your company transactions from personal transactions. This can assist you at proper bookkeeping, which further can help you maintain an immaculate record of your company expenses and income.

  • Make operations easy

Any delayed transaction may result in hiccups. With a current account, all your company operations can run like a smooth machinery. Through this account, all your regular transactions are conducted effortlessly and proficiently. Advantages of online banking are provided in current accounts. Generally, the transaction speed is high, which helps you at maintaining a good rapport as well as form a sense of trust with vendors and customers.

  • Provides high creditworthiness

Before assigning any work, many of the companies may ask for a credibility letter. It is a letter that banks issue. Thus, if you have a good relationship with the bank in the form of a current account, you may ask the bank to provide you with a letter to show your creditworthiness to the other company.

  • Provide business legitimacy

Separate business and personal accounts not only help in clean bookkeeping but also provide other current account benefits. While being the owner of a company, you may write cheques and transfer funds to vendors, partners, or others through your savings account, it may look unprofessional. Opting for a current account in your business name enables your payees to be confident about you having a legitimate business.

Other important current account benefits

Current account is a zero-balance account that comes with other benefits like free RTGS, pay orders, demand drafts, provision of unlimited withdrawals and deposits.

Ending note

Current account comes with various benefits. It provides assurance about continuous cash flow efficiency and eliminates the need to worry about transaction limits in a specific time-period. Overdraft feature provision is a major advantage of this account that assists your company with various business linked expenses at times when your company is still waiting for the payment from vendors or suppliers.