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A current account is a deposit account built for the unique needs of businesses. It helps businesses handle a massive volume of day-to-day transactions, and offers features and services that make managing business finances a whole lot easier.
Opening a current account is your first step not just towards business legitimacy, but also smoother and more organised financial operations.
Here’s a quick read on the benefits of current accounts.
Benefits of current accounts
From streamlining your business finances to imparting legitimacy to your financial operations, there are many benefits of opening a current account.
1. No balance? No problem.
Picture this. It’s the end of the month.
On one hand, you’ve made sales and your payments are yet to come through – and they’re not expected for another couple of days.
On the other, you have bills to pay and all your due dates fall before you’re due to receive your payments.
What if, in the process of paying your month-end dues, the balance in your account hits zero? Worry not. This is where the overdraft facility steps in.
One of the key benefits of current accounts is the option of overdraft. This means you can overdraw your account (withdraw money beyond your available balance) for a short period to meet working capital needs or deal with a short-term cash crunch.
Depending on the bank’s terms and conditions, your transaction history and your rapport with the bank, you may or may not be charged interest on the amount you overdraw.
2. Never run out of cheque leaves.
Remember the time you opened a savings account? Your bank, most likely, gave you a chequebook for the year. Once you were out of leaves, you had to go back to your bank and pay to get another chequebook.
It works differently for current account holders.
Another one from the host of benefits of current accounts is that you get an abundance of cheque leaves.
As a current account holder, you get a set number of cheques that you can use every month, free of charge. This means you get a chequebook refresh every month (based on the terms of your bank) so you can transact without the frustration of running out of cheques.
3. Transact, transact more, and transact some more.
Your business most likely makes thousands of transactions every month, which will surely increase as you grow. In this situation, limits on the number of transactions is unthinkable.
One of the fundamental benefits of current accounts is the absence of transaction limits. This happens two ways. One, you don’t have limits on the amount of any transaction. And two, you can make any number of transactions in a month, whatever way you prefer – online transfers, cheques, demand drafts, pay orders, or in cash.
4. Credit, set, grow!
When it comes to making them part with their money to fund you, financial institutions can be difficult to convince. And, a current account can give you quite the boost there.
A current account is a record of your transactions, including repayment of previous debt if any. It also shows the lender your financial standing – and the very basis of your financial projections.
Giving you credibility in the eyes of financial institutions and helping you maintain a sparkling credit score thus become lesser-known but vital benefits of current accounts.
5. Current account, future plans.
When you set out to make projections for your business, having messy financials doesn’t help.
One of the many benefits of current accounts is that they render your money matters legible. Current accounts help provide a clean record of your transactions for analysis, telling you exactly where your money is coming from and going, and painting a picture of your growth on a month-on-month basis.
Looking at the trends your current account is showing you and analysing them, you can chart out a plan for the future of your business backed by clean financial data.
The current account you need
The RazorpayX powered Current Account is a feature-loaded banking hub that your business needs. Backed by leading private banks, the RazorpayX powered Current Account automates and streamlines your business banking so you can focus on growing your business, instead of spending hours managing your money.
In addition to standard operations, your RazorpayX powered Current Account lets you:
- Add beneficiaries and transact instantly, without a cooling period
- Gain detailed insights into your finances from a powerful dashboard
- Automate payouts with powerful APIs
- Set up approval workflows so you never have to deal with OTPs
- Make tax payments from one dashboard – without having to hop portals
- Get full access to the RazorpayX product suite: Payouts, Vendor Payments, and Payroll
… all with 500 free payouts every month!
That’s not all. You can apply for a RazorpayX powered Current Account in a matter of minutes.
Ready to supercharge your business banking?
Frequently Asked Questions
What is a zero balance current account?
A zero balance current account is a current account that allows business owners to carry out transactions without any mandatory obligation of maintaining a Monthly Average Balance (MAB).
What is Monthly Average Balance for a current account?
Monthly Average Balance or Minimum Average Balance (MAB) refers to an account’s average closing balance on every day of the month. It is given by: MAB = sum of the closing balances for every day of the month/ number of days in the month.
Who can open a RazorpayX current account?
Registered enterprises of these business types can open a RazorpayX Current Account:
- Sole Proprietorship
- Limited Liability Partnership (LLP)
- Private/ Public Limited companies/ One Person Company (OPC)
What are the documents necessary to open a current account?
Listed below are the basic KYC documents that are necessary to open a current account irrespective of the type of business:
- Incorporation certificate or proof of business registration
- PAN of the entity
- Proof of Identity – any one out of Voter ID card, driving license, Aadhaar card, PAN card, passport
- Proof of Address – any one out of rent agreement, Aadhaar card, voter ID card, water bill, electricity bill, telephone bill, driving license, passport
- Account opening cheque from an existing bank account
- Latest passport size photograph
Businessowners must note that they have to submit KYC documents for all the authorised signatories for the business.