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Whats is the benefits of bank current account

michaelK (NA) (46 Points)

24 April 2012

Businesses are flourishing in India at a very fast pace due to rising market demands. The manufacturers take care of the requirements of the demanding markets, amidst all this their capital too needs to be looked after; this is exactly what bank current accounts do. Current accounts cater to the needs of business owners who are constantly dealing with money for a variety of professional reasons.

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Vikram (Financial Accountant) (43 Points)
Replied 06 June 2017

It Segregate business finance from personal finance: Sole proprietor is not a separate legal entity who is different from his business, unlike a company. This does not mean that bank accounts should also be the same. By opening a separate current account in which business income and expenses are recorded helps in bringing about a distinction of what pertains to the business and what pertains to the personal finance of the proprietor. This not only helps in better financial planning on the personal front, but also helps in giving an exact picture about the business at any point in time. In some cases, when all the transactions are carried out in a single personal account, the proprietor may not be able to recognize that his business is running at a loss if his personal finances are healthy. A segregation of business finance from personal finance is critical, and this is enabled by having a current account.

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Vikram (Financial Accountant) (43 Points)
Replied 06 June 2017

Overdraft : Another important benefit of having a current account is that one can easily avail overdraft facilities when needed. This means, the account holder can overdraw the balance in his account on a temporary basis, to plug the shortfall in funds. This is like a short term borrowing, on which the bank may or may not levy interest. A normal savings bank account does not have the facility of overdraft. A current account can therefore help in meeting your short term need for money.