Benefits of Having a Current Account
A current account is a financial tool usually opened by business entities to carry out banking transactions. Since they are zero-interest bank accounts, they are ideal for large-scale transactions on a daily basis. However, not much is known about their multiple benefits for employed professionals. Sole proprietors, freelancers and other workers who run their own thing generally drift towards savings account for business transactions. As a result, they are unable to take advantage of the following benefits of a current account.
BRINGS PROFESSIONALISM IN BUSINESS:
Having a current account in the name of your business goes a long way in legitimizing your work. This is because the cheques you issue will carry the name of your current account, and build trust in clients. It also displays an efficient and professional image and signifies the growth of your business.
KEEPS PERSONAL AND BUSINESS FINANCES SEPARATE:
For freelancers and sole proprietors, it is important to segregate personal and business accounts. Unlike a company, they are often not treated as a separate legal entity. But a current account can help in being treated in a more professional regard by clients. A current account can also help in financial planning and track the progress of the business.
Another important benefit of having a Current Account is that one can easily avail overdraft facilities when in need. Overdraft facilities allow the account holder to overdraw the balance in the account on a temporary basis, in case of any shortfall in funds. This short-term borrowing facility is not available in a savings account. Depending on the bank, you may or may not be levied interest.
USEFUL FOR LOANS:
It can be used to prove your creditworthiness to banks and lenders. Just a simple letter stating that you are a Current Account holder by a reputed bank eases the loan process a lot.
EASES BANKING TRANSACTIONS:
A current account offers easy and quick banking experience that comes with a lot of facilities. Banks prefer opening current accounts as there is no interest charged on the holder. These accounts also come in-built with useful services like 24 hrs mobile banking, net banking, doorstep banking, and mobile alert services. While these may be available for savings accounts, there is no minimum balance requirement for current accounts. Additional benefits include free inward remittances, deposits, and withdrawals at any locations, free pay orders/demand drafts, personal finance manager, etc.