Current accounts are mostly popular among business owners for easy access to liquid cash. Such an account offers little or no interest, contrary to a savings account. It caters mostly to people who are involved in frequent transactions of huge amounts and, therefore, mainly to businesses. However, holding such an account for personal finance is also an astute choice for a sole proprietor or a freelancer. A sole proprietor is not a separate entity from his business, unlike a private limited company, therefore there is often a mix of personal and business finance. Such an account can be instrumental in keeping the two distinct, which creates better visibility, and ultimately leads to better financial planning. Here are some other reasons that prove that this is a worthwhile exercise.
3 Reasons for Owning a Personal Current Account
- Reward Programs: Different banks offer distinct reward programs to encourage a range of financial transactions that can be undertaken through them. There are some that offer points for maintaining an average balance in the account. In these accounts, the higher the average balance, the higher points. These points can then be reimbursed for airline tickets, hotel bookings, or used for purchases in the bank’s reward shop. Opt for a bank that offers retail redemption for goods and services that you frequently avail.
- Proves Credit Worthiness: As in the case of businesses, when you opt for a loan, the bank determines whether you are worthy of it by analyzing your credit score, which in turn is determined your credit history. But what if it is your first loan and you have not used a credit card before? If you are seeking a loan from the bank in which you hold the account, your chances of having it approved are higher. On the other hand, if you are seeking a loan from an external lending agency, having a current account with a reputed bank can increase your chances of having the loan approved.
- Ease of Transactions: Finally, the USP of such an account is that it allows for frequent transactions without any extra charges. You can withdraw or deposit as much cash or as many cheques as you may need without having to pay a transaction fee. Moreover, with additional channels, such as internet banking, mobile banking and on-call banking, one can manage ones payments from anywhere and at any time.