A current account is an essential banking product for businesses, including startups. Unlike a savings account, a current account allows businesses to carry out various transactions like deposits, withdrawals, and payments. In this article, we will discuss everything you need to know about a current account for startups in the Indian context.
What is a current account?
A current account is a type of bank account that allows businesses to carry out various transactions like deposits, withdrawals, and payments. It is different from a savings account in that it does not pay any interest on the balance and has no limit on the number of transactions that can be made.
Why do startups need a current account?
Startups need a current account for several reasons, including:
- To carry out business transactions like payments to suppliers and employees, receipt of customer payments, and other expenses.
- To maintain a clear separation between personal and business finances.
- To establish credibility with suppliers and customers by providing them with a professional payment option film indir mobil.
Documents required to open a current account
To open a current account for your startup, you will need to provide the following documents:
- KYC documents of the authorized signatories of the company, like PAN card, Aadhar card, passport, or voter ID card.
- Proof of business registration like GST registration, trade license, or incorporation certificate.
- Address proof of the registered office of the company.
Types of current accounts
There are different types of current accounts offered by banks in India. Some of the common types are:
- Standard current account- This is a basic current account that allows businesses to carry out transactions like deposits, withdrawals, and payments.
- Premium current account- This is a high-end current account that comes with additional features like higher transaction limits, priority banking services, and dedicated relationship managers.
- Zero-balance current account- This is a current account that does not require the business to maintain any minimum balance.
Fees and charges
Banks may charge various fees and charges for their current account services. Some of the common fees and charges include-
- Account maintenance charges- This is a fee charged by the bank for maintaining the account.
- Transaction charges- This is a fee charged for each transaction made on the account.
- Cash handling charges- This is a fee charged for depositing or withdrawing cash from the account.
- Chequebook charges- This is a fee charged for issuing a chequebook for the account.
Choosing the right current account
When choosing a current account for your startup, you should consider the following factors:
- Transaction volume- If your startup has a high volume of transactions, then you should choose a current account that offers a higher transaction limit.
- Fees and charges- Compare the fees and charges of different banks before choosing a current account.
- Additional features- Consider the additional features offered by the bank, such as net banking facilities, mobile banking, and SMS alerts.
- Managing your current account- Once you have opened a current account for your startup, you should take the following steps to manage it effectively:
- Keep track of your transactions- Keep a record of all transactions made on the account to monitor your cash flow and identify any discrepancies.
- Maintain sufficient balance- Make sure you maintain a sufficient balance in the account to avoid penalties for non-maintenance of minimum balance.
- Avoid overdrafts- Do not use the overdraft facility unless it is absolutely necessary, as it comes with high-interest rates and fees.
- Review your account regularly- Review your current account statements regularly to ensure that there are no unauthorized transactions and to identify any areas where you can reduce expenses.
In conclusion, a current account is an essential banking product for startups in India. It allows businesses to carry out various transactions and maintain a clear separation between personal and business finances.