A zero balance current account is primarily opened by business entities that carry out a large number of transactions on a regular basis. This includes deposits, withdrawals, cheque deposits, and contra transactions. This service can be availed by other entities as well like a freelancer, individual, or sole proprietor. The majority of the people in these categories use their savings account for business purposes which deprives them of enjoying the benefits of a zero balance current account. It is a much-needed account for small and medium-sized businesses (SMBs) as they don’t have to maintain a monthly average balance (MAB) which gives them more flexibility in managing their working capital.
Let us further tell you about the 7 main benefits of a zero balance current account:
1) Unlimited Transactions – There’s no limit on the number of transactions and the daily upper limit is very high which ensures maximum fluidity in business operations.
2) No Transaction Charges – Businesses can make single or bulk payments through multiple modes like RTGS, NEFT, ECS, IMPS, and UPI without worrying about the transaction charges.
3) Manage Business Funds Exclusively – A current account will help you keep your business and personal funds separately. The business cash flow can be easily audited which will help you to plan the budget and expense better. It will also be useful for tax calculations and deductions.
4) Business Legitimacy – Running the expenditures through a personal account is often seen as an unprofessional way of handling business operations. Having a current account adds to the legitimacy of a business and also helps at the time of availing of business loans.
5) No Standing Instruction Charges – Businesses often have to make periodic scheduled payments for fund transfers, third-party payments, EMI for running loans or repayments. The current account helps them to avail standing instruction facility to automate such payments with zero charges.
6) Creditworthiness – Businesses may want to avail lending facilities at the time of shortage of funds. Having a current account in a reputed bank will help prove your creditworthiness and will help in easing the lending process.
7) Value-added services – There are several types of current accounts based on the different requirements businesses might have. All the accounts have customised value-added services as well.
For instance, OpenBook Current Account caters to small and medium-sized businesses and offers tools to simplify the billing, accounting, and GST process.