When should a business open a current account?

If you are planning to start a business or are mid-way through, then you may have a lot of questions related to your banking account that you will use for all your financial transactions.It is very important for businesses to be financially sound, especially when it comes to their expenses and banking needs. A strong knowledge base combined with great business acumen can be helpful in having a healthy balance sheet. To address their increased financial needs, businesses in India usually have a current account associated with their banks.

What exactly is a current account?

A current account enables entities to carry out financial transactions of high amounts and also provides a range of other benefits that are specifically suited to these businesses.A current account provides offers and lucrative deals which are well-suited for all companies. With a current account, a company can enjoy customized and tailor-made services. A current account enables all kinds of businesses to carry out their financial transactions of high amounts and also provides a range of other benefits that are specifically suited to these businesses.

The best part of opening a current account in recent times is the fact that you do not have to visit the bank most of the time. You can simply get everything done through your mobile phone or a computer. Banks also treat these accounts with utmost care and ensure that you do not face any difficulty in your banking journey with them.

A variety of other benefits associated with a current account

For current accounts, many banks offer free of cost folio charges, free demand draft facilities, lucrative overdraft facilities, significant number of free cheque books, waivers for many other services.

A current account may also be helpful in boosting your credit score. There may inevitably come a time when you will look to grow your business and need loans. A bad credit score in such a case may not be helpful. Your current account depicting correct financial flows may help in having a satisfactory credit score and determine your creditworthiness. A healthy and sound current account statement can help you get loans and improve your credit score, provided you repay these loans in a timely manner.

Banks provide a host of other services. There are varied benefits and value-based services associated with a current account. They may provide free financial advisory services, ease in foreign trading, special Forex rates, etc.

In India, a current account has many features and facilities that can address and cater a business’s needs providing them a seamless experience. This is a major reason for Indian businesses to open a current account.

When is the correct time for a business to open their current account?

When exactly should a business open a current account? The correct timing would be right away. If you have set up a business, made sure all the requirements are met and have all the necessary documents that you need, then you can open your current account right away. Once you officially become a business entity and have your GST license, you can proceed ahead. Even without a GST license, you can open a current account but you will need to submit a few other documents in theplace of your GST certificate. You need to have it opened before you start making any transactions related to your business. Any cash withdrawals or cash deposits will be done through this account. Hence, before you start any monetary operations, opening a current account before that is a must.

Also, you should open a current account irrespective of how small or big your business may be.If you are a startup, you may be eligible for certain schemes. Every business entity must open it as soon as they are set up and ready to transfer or receive money or simply avail any other services. Delaying this may result in more delays that may involve money, which may eventually impact your business.

Disclaimer: The above article is subjective and generic in nature. It is purely for informational purposes only. It is recommended not to substitute this article in place of a professional advice.