Current accounts are specifically designed for business owners, and these types of accounts offer them several key advantages. Read on to know the key functions of current accounts including their features and benefits.
What are current accounts, and how do they work?
The most popular category of bank accounts today is the savings account. Savings accounts cater to the needs of an individual such as helping them save and helping them receive a monthly salary. Current accounts, on the other hand, help business owners manage the finances of their business(es). The primary objective of a current account – unlike savings accounts – is to cater to the needs of a business. Current accounts offer certain specific features such as higher transaction limits on monthly cash deposits and withdrawals. Digital current accounts can be opened without following any paper-based procedure, completely online, through the bank’s mobile banking app.
What are the features of current accounts?
Here are the key features of online current accounts in India:
- Current accounts are easily accessible and offer high liquidity: These accounts are particularly designed for business owners who must make regular transactions. Therefore, they offer high liquidity to customers, thereby making their funds easily accessible at all times. You can access the funds in your current account through your bank’s mobile or internet banking services.
- They offer higher transaction limits to customers: Current accounts are also beneficial to business owners since they allow customers to make frequent large-scale transactions. They offer high withdrawal and deposit limits to ensure that a business’s transactions are not hindered by account limitations.
- Current accounts also offer the overdraft facility: An overdraft facility helps customers overdraw from their current account up to a certain limit. In case a business owner requires working capital for the short term, they can opt for this facility offered by online current accounts.
- Generally, current accounts do not offer interest on the deposited amount: Banks have this rule due to the high liquidity and transactional nature of these accounts. This is one of the main points differentiating current accounts from savings accounts.
Benefits of current accounts:
Here are the key advantages of opting for current accounts:
- Current accounts are extremely convenient for business transactions: If you open a current account online as a business owner, you can rest assured about your business transactions being convenient and accessible at all times.
- Having a current account can help you better organise your finances: Handling the finances of a business is no easy task. You must account for all the transactions made every day, and a current account helps you do that in the most effective manner.
- Current accounts facilitate fast digital payments: In addition to facilitating online payments via NEFT (national electronic funds transfer) and UPI (unified payments interface), current accounts offer solutions for payroll management and other modes of online transactions.
- These accounts can offer valuable creditworthiness insights to financial institutions: If you intend to opt for a credit card in the future, your current account can act as a reliable source of information if the institution wishes to gain insights on your creditworthiness.
You can open an online current account by visiting a bank’s official website or by downloading their mobile banking app. You can contact the bank’s customer service to know specific details related to the eligibility criteria for current accounts.
