Why Current Accounts?
Business activities need a lot of other parties to function properly. Investors, shareholders, directors, owners, managers and even banks: all should make a contribution of some kind to keep the business running. When it comes to banking activities, banks tend to offer a lot more facilities for businesses than they do for regular people to facilitate their activities. Among such facilities are the well know current accounts.
Current accounts are specially aimed for business owners. The fact that they are mostly zero interest accounts is often enough to make normal people to decide to refrain from opening one. On the other hand, business owners need to give special attention to their transactions, and the best way to do this is opening a current account. In fact, there must be a reason why company registration and bank account set up are the top priorities of anybody who wants to start a serious business. Look here for further information regarding company incorporation fees.
The reasons for opening a current account are many: first of all, it is the best possible way to separate your personal savings and finances from your business. While this may not seem necessary, this is pretty much compulsory for any businessman dealing with a large number of business transactions daily. Keeping a separate account for your business transactions makes it easier to prove credit worthiness, as well as to attract potential investors and clients.
Banks overdrafts are a banking facility provided to current account holders. It allows them to obtain a kind of short-term loan, by allowing a withdrawal of money higher than the amount deposited in the bank at that moment. This, along with the availability of issuing cheques and direct payments are some of the benefits given almost exclusively by current accounts.
Of course, current accounts do have their drawbacks as well. First of all, they are harder to open than normal savings accounts or the like. They need a much higher starting deposit and they require the account holder to keep a minimum amount deposited at all times. Failure to do so can lead to surcharges by the bank, on top of the extra charges imposed by the bank for operating the account. This makes current accounts difficult to maintain for small business owners and start-up businesses. In that case, opening an account can wait, while funds are allocated to more important aspects such as business incorporation services. You can also decide to close your account if you decide to stop your business activities or sell of your business to somebody else, as current accounts will be expensive to maintain.
In conclusion, are current accounts worth it? Unless you are under special circumstances, operating a current account is a must for any businessman who wants to smoothly conduct his business activities. In fact, you may find out that you will frequently need the added banking services only provided to current account holders, in which case you will not regret your decision.