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How to select the right Current Account for your startup?
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Every business, no matter at what stage, needs a Current Account for seamless banking transactions and business support. As a startup, you may be considering opening a Current Account for the first time so that you can start separating your personal and business transactions. That’s a great move, and one that requires some time and research to select the right kind of Current Account. Here’s how you can go about it.
1. Consider the needs of your startup
It’s essential to look at what your business needs in terms of banking solutions. Do you simply want to separate personal and business transactions or do you want access to solutions such as collateral-free business loans, unlimited demand draft facility, or trade forex services? The more services that the Current Account offers, the higher will be the average quarterly balance requirement.
This is the minimum amount of money that you will need to keep in your bank account to avoid charges. If you are an early-stage startup, you may want this amount to be minimum as you would want to use those funds towards your working capital instead of having them tied up. Hence, it’s important that you first review what kind of business banking services and features your startup requires.
2. Compare Current Accounts
When undertaking Current Account opening, it’s important that you take some time to compare Current Accounts. This works at two levels. First, you can compare Current Accounts offered by different banks. Second, you can compare the different Current Accounts offered by your shortlisted bank.
Since different types of businesses have different needs, each bank offers a variety of Current Accounts with different features and services. When comparing Current Accounts, look at features such as the overdraft facility, quarterly average balance, interest rates, limits on transactions, card benefits, etc.
3. Keep the long-term in mind
When you look at Current Account for startups, there is one thing you should keep in mind - how your business will grow and expand over time and the services you will require.
As a startup, your aim is to grow quickly and so the needs and pain points of your business will rapidly change as you grow. In such a case, having a Current Account that can accommodate your business’s new needs while at the same time offering a wide variety of services that you can choose from as and when required is helpful. So, even if your startup may be at a nascent stage right now requiring only basic banking solutions, do look for a Current Account that can support your business over the long-term.
Additional Read: What are the benefits of having a Current Account?
Wrapping up
When considering Current Account opening, you essentially need to look at an account that allows you to transact securely, provides easy access to short-term and long-term credit, has a solid online banking infrastructure, and a wide variety of business solutions. Once you have narrowed down on the right Current Account for your startup, make sure to look at the Current Account documents required for a seamless application process.
Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
