A Current account, also known as a demand deposit account is a bank account suitable for businesses. Though it may seem like a normal account, these accounts offer more features than a savings account. Current accounts actually play a very important role in determining the health of the economy. It is the sum total of the balance of trade (goods and services exported minus the imports), net income from abroad and net current transfers. A positive current account balance indicates that the nation is a net lender and vice versa.
A current account can be opened with a financial institution such as a commercial bank or co-operative bank with a minimum balance starting from INR 5000. Some banks also offer zero current balance accounts. Because of the various extra features it has over savings account, you can not avail any interest on the money in your current account.
Since the number and amount of transactions is not limited in current account, it is extremely handy in the smooth functioning of your business on an everyday basis. A Current account is the life blood of modern trade and commerce. Listed below are some of the major factors that why current account is a must for entrepreneurs:
• One of the key aspects of a current account is that it has an overdraft facility. You can borrow money from the bank through your current account on a short term basis.
• By having a current account you have a clear picture of your business and its growth. It helps you in showing the actual profit and loss statements as it does not offer any personal transaction feature.
• It enables you to carry out your everyday business transactions promptly and properly so that your day to day business activities do not suffer on an account of financial issues.
• It is also very useful to businesses as it allows them to make direct payments to their creditors through cheques, demand draft and pay orders.
• The number of transactions and the withdrawal amount is not limited as compared to a savings account which help you to carry out as many transactions as needed.
• Many companies ask for credit worthiness letter from the bank before handing over a project. So if you have a current account which is well maintained without any defaults, you can get a recommendation for your credit worthiness without any hiccups.
• All the transactions made in your current account are eligible for tax exemptions. These tax exemption feature helps the business save money on taxes.
Having a current account for your business also gives you a more professional presence. At the same time it gives you more flexibility to carry out your business as compared to a savings account.
A current account can be opened with a financial institution such as a commercial bank or co-operative bank with a minimum balance starting from INR 5000. Some banks also offer zero current balance accounts. Because of the various extra features it has over savings account, you can not avail any interest on the money in your current account.
Since the number and amount of transactions is not limited in current account, it is extremely handy in the smooth functioning of your business on an everyday basis. A Current account is the life blood of modern trade and commerce. Listed below are some of the major factors that why current account is a must for entrepreneurs:
• One of the key aspects of a current account is that it has an overdraft facility. You can borrow money from the bank through your current account on a short term basis.
• By having a current account you have a clear picture of your business and its growth. It helps you in showing the actual profit and loss statements as it does not offer any personal transaction feature.
• It enables you to carry out your everyday business transactions promptly and properly so that your day to day business activities do not suffer on an account of financial issues.
• It is also very useful to businesses as it allows them to make direct payments to their creditors through cheques, demand draft and pay orders.
• The number of transactions and the withdrawal amount is not limited as compared to a savings account which help you to carry out as many transactions as needed.
• Many companies ask for credit worthiness letter from the bank before handing over a project. So if you have a current account which is well maintained without any defaults, you can get a recommendation for your credit worthiness without any hiccups.
• All the transactions made in your current account are eligible for tax exemptions. These tax exemption feature helps the business save money on taxes.
Having a current account for your business also gives you a more professional presence. At the same time it gives you more flexibility to carry out your business as compared to a savings account.
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