Starting a business is a dream come true for many individuals, but it requires a lot of hard work and effort to make it successful. There are countless things to consider, from the initial conception and development of a product or service to recruiting the right team, finding an affordable office space, and much more. However, one of the most important aspects of building a successful start-up is effective financial management. For new-age entrepreneurs, one important tool to manage cash flow and simplify business finances is a Current Account.
A Current Account is a type of bank account specifically meant for businesses. From conducting daily transactions to overdraft facilities, a Current Account offers numerous features to streamline financial transactions for start-ups. It also gives entrepreneurs an overview of their financial standing with its online banking services and tools. But the key is to choose the best Current Accountthat offers features and benefits suitable for your business.
Let’s explore the essential criteria to consider when making this decision –
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Low minimum balance requirements
Maintaining a minimum balance can be challenging for start-ups with limited cash flow. A Current Account with a low minimum balance requirement can help save money, as hefty fees and charges usually apply for not maintaining a minimum balance. The saved money can then be invested in growing and expanding the business.
Therefore, check this feature in every business Current Account to avoid unnecessary financial burdens on your start-up.
High overdraft limit with competitive interest rates
Open a Current Account online with a bank offering a high overdraft limit so that your start-up can access sufficient funds in case of working capital shortages or payment delays. By selecting a higher overdraft limit, you can preserve your business reputation while avoiding any additional expenses, as interest is charged only on the amount used through the overdraft.
An affordable interest rate is equally important as you have to repay the amount with interest. Low-interest rates are beneficial for start-ups as they are still in the early stages of growth and may need to keep their expenses under control.
ActivMoney (autosweep) facility
Many types of Current Accounts come with the ActivMoney feature (auto sweep facility), which is a crucial consideration for entrepreneurs. This auto sweep facility automatically transfers any surplus funds above a predefined threshold into a Fixed Deposit, generating interest and maximising returns.
Additionally, there is no penalty for premature withdrawal of the Fixed Deposit, so the funds remain accessible anytime they are needed. This feature helps start-ups keep their funds working for them instead of letting them sit idle in regular Current Accounts that earn no interest.
Digital Current Accounts
New-age entrepreneurs require banking services that keep up with their busy schedules and offer the agility they need to manage their finances remotely, conveniently, and effectively. Here, a digital Current Account for startups can be useful.
With features like contactless account opening, minimum document upload, virtual debit cards, exclusive discounts, cashback, low transaction fees, and availability of various banking services, a digital Current Account offers a hassle-free banking experience. These benefits help entrepreneurs save valuable time and focus on growing their start-ups with efficient financial management.
Start-ups require a Current Account that can help them cut costs, increase productivity and make banking processes seamless. Hence, features such as high free transaction limits, overdraft, mobile banking, and value-added services are crucial to consider. It is equally important to choose a banking partner with a solid reputation, excellent customer support, and user-friendly banking products.
These strategic decisions can help new-age entrepreneurs to leverage the right Current Account to maximise opportunities and grow their start-ups with low cost and high output.