Bank accounts are a great way to store your funds for safe keeping. It is also the mean to invest your funds for better returns, with the right investment strategy. For such a requirement, we have a saving account.
However, certain restrictions with this account withhold the functionality of banking transaction. For example, the saving accounts offer the ability to withdraw funds. However, the account holder can only make limited free withdrawals. For business oriented account holders, this can be a major drawback, especially when the account is tied up to their business.
This is where the current account comes into place. The features of this account allow the account holder to make multiple transactions such as deposits and withdrawals amongst many others. Apart from this, here are additional features of the current account you can take advantage of:
• The current account is best used to operate businesses. It can also be used for any business purposes, namely if you will be making regular transactions with another business.
• You can make transactions through NEFT channels. The national electronic funds transfer is a nationwide payment system that facilitates a one to one fund transfer system. Under this scheme, the account holder can electronically transfer funds from one bank branch to another. Depending on the bank or financial institute, the transactions can be done free or at a marginal rate.
• The current account uses a real-time gross settlement system. This system facilitates the online transfer of high-value funding between banks or financial institutes on a real time basis. Like the NEFT rates, this transaction can be done free or at a nominal rate, depending on the institute.
• Some banks or financial institutes offer flexible services depending on the requirements of the business. For example, during peak seasons, there is a higher possibility of transactions. While this may not put pressure on maintaining the minimum average balance, during off season, it will be a problem. In such a case, banks and financial institutes will be lenient enough to allow a low average balance, without suffering any penalties for it.
• Depending on the bank or financial institute, you can even conduct transactions in foreign currency. This can be conducted under the approval of the RBI. Through this process, your bank or financial institute will maintain a record of your foreign exchanges through regular statements. They will also provide you with a preferential rate when converting your foreign currency into the local currency. This account will also be designed to protect your investments, during exchange rate fluctuations.
• Some banks will offer extended benefits to importers and exporters. Some of these specialized features include zero balance accounts that enable the account holder to utilize financial resources more effectively. Some of the other features also include free inward remittance and no charges on foreign inward remittance certification or even bank realization certificate issuance.