A Current Account plays a crucial role in managing your business finances. It is a safe place to park your money along with availing several other benefits. However, with many options available, choosing the right account is essential. There are specific parameters that you can consider to identify the one that suits you best.
Fees and Charges: These are variable aspects of banking services. Different Banks have their own set(s) of charges. Some levy on a monthly basis to keep the account active, while others charge transactions. Therefore, the first and foremost thing to do is to check the Bank’s charges associated with the services. These include cash deposits and withdrawals, fund transfers, chequebooks, account maintenance, on-call requests, etc.
Account Services: Reputable financial institutions like Kotak Mahindra Bank offer feature-rich Current Accounts with exclusive services like free NEFT and RTGS, phone and net banking, outstation cheque collection, and free cash withdrawals. Some high-end accounts also offer premium services like home banking, free debit cards, better forex rates, a dedicated relationship manager, and a waiver on non-maintenance charges. You can evaluate all the services offered and make your decision.
Depending on your requirements and banking frequency.
Overdraft Facilities: Most Banks provide overdraft facilities with Current Accounts. With this facility, you can withdraw more than your account balance. It is an excellent facility for resolving liquidity issues arising during the business life cycle. You must pay an interest rate only if you withdraw higher than the account balance and only on that amount.
Therefore, ensure the Bank offers an overdraft facility for the Current Account. Moreover, check the applicable interest rates, credit limits, and other conditions.
Business Support and Relationship Management: Consider the business support level that the Bank provides. Renowned institutions like Kotak Mahindra Bank assign dedicated relationship managers to such accounts. These managers assist account holders with efficient account management and provide financial advice according to business requirements. They can be reliable points of contact, especially when dealing with complex business transactions and issues regarding financial matters.
Online Banking Technology and Security: Ensure that the Bank’s net banking platform uses robust security measures to safeguard your sensitive information and financial transactions. Features like fraud detection systems, encryption protocols, and two-factor authentication protect your finances when performing everyday banking operations. Before opening a Current Account, assess the Bank platform’s ease of navigation and user interface.
Minimum Balance Requirement: You must maintain an average quarterly balance to keep your account active. If you fail to meet these criteria, you face penalties. Prolonged non-maintenance often even results in the deactivation of the account. Therefore, check your Bank’s minimum balance requirement beforehand.
Customer Service: If you have difficulty paying or performing another activity, you will need quick help from an expert customer representative. Efficient customer service means the Bank must be accessible through multiple communication channels like email, chat, and phone. Check the customer service department’s working hours to ensure you can access them to get an issue fixed immediately.
Eligibility Conditions and Documentation Requirements: Check the types of Current Accounts your Bank offers. The eligibility conditions and documentation requirements differ across the various account types you open. Check the Current Account opening documentsrequired by your preferred Bank and the eligibility criteria to ensure you can fulfil them without hassle.
Interest on Surplus Funds: Most Banks do not provide interest rates on Current Accounts. However, some provide interest on surplus plus by providing an auto sweep facility. This feature automatically converts any amount over a specified limit into a fixed deposit. For instance, if your set limit is Rs. 2 Lakh and your account balance reaches Rs. 2.5 Lakh, you will earn an FD-like interest on the excess Rs. 50,000.
These are some crucial points to evaluate before opening a Current Account. Also, do not forget to check impressive privileges like dedicated relationship managers, smooth business transactions, overdraft facilities, and more.