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The Top 5 Current Account Myths – Busted

03 Jan, 2017

Your current accounts play a huge role in how you manage your business. From overdrafts to sending cheques to your partners in business, you carry out all your business transactions with the help of your current account. However, there are several myths surrounding the operation of a current account.

It’s time to get to the truth. Here are some of the top myths and the truth behind them.

Myth 1: You can have only one current account.

False. The reality is you can have as many current accounts as you wish for your business. Yes, you can have several current accounts in different banks.

In fact, there are several benefits in having more than one current account.

For instance, some banks may give your more interest on your balance than others. Whereas others may offer other incentives like a free debit card or free SMS intimation and so on. While choosing a bank, always choose long term benefits over short term offers and incentives.

Myth 2: Switching Bank Accounts is Impossible if you have Overdrafts

Again, this isn’t true. Almost all banks and other financial institutions offer a free Current Account Switching Service for seven days.

One thing to bear in mind, when switching accounts is that, while transferring from one bank to another, is that your overdrafts are also transferred. Your balance, your overdraft status, your credit history and other info are transferred to your new account.

Remember that the overdraft limit varies from one bank to another. So, always check the limit, before switching over your current account to a new provider.

If you find any other bank offering you better interest rates or better suited to your purposes, then make the switch!

Myth 3: Photo ID is mandatory to open a Current Account

The answer to this one isn’t clear cut. While most bank accounts require a photo ID like your PAN card, driving license or passport to open a new account, others aren’t too stringent. It’s true that you must supply an ID, to open a new account. But, it isn’t necessary, that the ID must have your photo.

Some banks accept utility bills like an electricity bill, as an ID proof. Most banks have a list of the documents they receive. If you don't have any of these accepted documents, you can visit the bank and talk to the personnel.

They can help you out, by providing you a list of alternative documents. However, you must know that a non-photo ID may require you to visit the bank in person to open an account.

Myth 4: Current Accounts can be opened only for a fee

False. You needn’t pay an extra paisa to open a current account when compared to regular savings accounts. However, you can upgrade your current account to a premium one for an additional charge. This lets you make use of additional perks like unlimited cheque leafs per month and so on.

Myth 5: Only one person can Operate a Current Account

Wrong. You can open a current joint account with your business partner or partners. Joint accounts are an excellent way to manage your finances together. You can use the joint account to pay for utility bills like rent, electricity for your business premises.

 

As with any other types of accounts, there are several different types of current accounts. So, check the various types and pick the one that matches your business goals.

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