Mostly small businessmen do business through cash transactions rather through the bank. Since they do the less online transaction and also there are some charges in opening a current account and its minimum balance requirement is a little bit more. So, they have a common query that if they can use the savings account for business purposes, and if they can, then will the IT Department pose a problem or will their bank close their savings account?
To answer these queries, let’s first discuss some banking rules regarding this.
If we study rules and regulations regarding Savings Accounts, It is clearly stated that Savings Accounts can be used for savings, it must not be used as a current account and if the bank finds that savings account is used as a current account then it can close the account.Buy Best Quality Winter Clothes For You From Here
Now let’s discuss the practical aspects.
In reality, many small businessmen are using their savings account as a current account without any problem.
Then the question is, besides so many rules about how they can do so?
Since banking transactions of many businessmen are very less, therefore banks can’t trace them and if anyone makes frequent transactions in a bank, then the bank insists that businessmen change his savings account to the current account. That’s why small businessmen are still making their business transactions through the bank.Buy Cheap And Best Quality Kids Toys Here
So, Should all small businessmen open the current account?
The answer to this question depends upon various situations, stated below:
If the businessmen have a small business and don’t want to extend his business in the future, then he may not open the current account as there will be the minimum number of transactions that can’t be tracked by banks.
If the businessmen have a small business and want to expand his business, then he should open a current account and do all business transactions through the current Account.
As we know the minimum balance requirement and charges to open the current account is more, but it offers many benefits:
Segregation of Payouts
When you make your business transactions through the current account, it will help you to distinguish between your personal expenses and business expenses. It will clear the image of your savings and your expenses.
Provide Identity to Business
Current Account gives identity to your business as it is named after your business
When you make the transaction through current Account, it provides authenticity and credibility of your businessGet Great Offers On Beauty Products. Click Here
Getting Business loan
If you have a current account, you can easily get a business loan.
Provide Overdraft facility
You can also avail of the overdraft facility. Sometimes, we give the check to someone, and money is short in our current account, then the bank may give the short money to avoid check bounce. So the bank provides the overdraft facility to the current account holder and this limit may vary from customer to customer according to their past transactions.
Now you may have got the idea that which account is suitable for you.