It is very important for businesses to be financially sound, especially when it comes to their expenses and banking needs. A strong knowledge base combined with great business acumen can be helpful in having a healthy balance sheet.
We know that businesses in India mostly use a current bank account for their activities. The reason is simple. A current account enables them to carry out financial transactions of high amounts and also provides a range of other benefits that are specifically suited to these businesses.
While companies enjoy these offers and services, these are, however, not exactly free of cost. Like most banking services, these also come with a charge. And as a business, it is imperative to know these charges are levied so that these are accounted for.
The following three are important current account charges that you should know about:
- Non-maintenance charges
Based on the kind of entity you operate as, and the kind or type of current account package that you have, you will be required to maintain a Minimum Account Balance (MAB) for your account. Some banks may require you to maintain an Average Quarterly Balance instead. When you fail to maintain these minimum required balances in your account, then the bank may need you to pay non-maintenance charges, based on your current account type (i.e., you may have different current account plans for different types of entities)
- Charges on bulk transactions
As a business, you may require to make many bulk transactions. Current accounts help businesses in doing so with great ease by enabling free bulk transactions. However, there is a limit on the number of free bulk transactions and this limit varies from one current account type to another. After you exhaust your free bulk transactions for a particular period of time, then you will be charged a basic amount for every such transaction that you make after this.
- Charges for the current account facilities
Businesses choose current accounts to avail facilities that may not be available in personal banking. Highly used services like request for overdrafts, demand drafts, duplicate current account statements, etc. fall under the chargeable category in most Indian banks. Nominal amount is also charged when a cheque bounces or in case of outstation cheque collection through your bank’s branch. NEFT and RTGS transactions are also charged in most cases if you are making these through your bank via offline mode.
Apart from the ones listed above, there may be other types of charges for your current account like those for account closure, interest certificates, balance enquiries, etc. Information related to all this may readily be available on your bank’s website. You can also contact your bank to know the updated charges or in case you have any queries.
Being informed about these banking charges is essential for businesses as it helps to opt for only those services that are essential and to avoid taking any unnecessary steps that may levy additional charges. Keeping a track of your account transactions will help you to know what kind of charges you need to pay the most and if any of these can be reduced or eliminated. Always be up-to-date with the types of charges that your bank may ask you to pay and while opting for any value-added services, read about any additional terms and conditions that would require you to pay additional amounts later.
Disclaimer: The above information is subjective and generic in nature. These charges may vary from bank to bank. Banks may also have many different charge brackets.