Acurrent account is a type of deposit account maintained solely to carry out large transactions regularly. These accounts are mostly used for businesstransactions between partnership firms, an association of people, trust, or public and private companies.
Current accounts allow making limitless transactions through cheques, demand drafts, pay-orders, RTGS or NEFT without any charges. Also, a bank does not offer any interest on current accounts. However, there are a few significant advantages of the current account that you might be unaware of. Let us take a look at them.
- Different types of accounts:
Not all businesses are of the same size. Some companies can reap benefits from the tailor-made features offered by a premium current account online. These customized accounts provide benefits that are unavailablefor the basic account types. Packaged current accounts offer extra benefits such as accident insurance and travel insurance. Businesses can even have foreign currency accounts if they would be sending or receiving payments in foreign currencies.
- Overdraft facility:
A current account allows overdraft facilities. Through this feature, the account holder can withdraw more than the balance to make up for the fund shortage. This workssimilar to a short-term loan. The bank might or might not levy interests on the overdraft facility. This facility is not available for other types of accounts.
- Proving creditworthiness:
Lenders and creditors want to know about your credibility before offering credits. A current account greatly helps in maintaining a credit score.Having a current account with a reputed bank usually does not require a letter of credit.
- Seasonal benefits:
Among some latent features of current accounts, you can enjoy periodic benefits. Banks would accommodate the changing needs of businesses during peak seasons. Also, during lean seasons, you need not bother about maintaining a huge minimum balance.
- Zero balance account:
Although current accounts require a minimum balance, there is a ‘zero balance’ account for start-ups, importers and exporters. They allow you to utilize financial resources better. Free inward remittance and no charges on Foreign Inward Remittance Certificate are among the other benefits you can enjoy with the zero-balance account.
These are some of the features of current accounts that are not known to everyone. Current accounts are flexible. Choosing the right type of current account is crucial to optimize your business operations.