As an entrepreneur, one must fully understand the role of the bank in order to make sure that he or she earns well. Surely, there are available programs that banks should have to earn while you do, but for me, I think it is more important that you, if you’re opening a business, should check out all Business Banks available and see for yourself which one would benefit you the most. I know for a fact that business ventures are like money to bankers ears and will most certainly try to lure you to create an account with them. I’d say go around and search for that which will give you the most features and, of course, the best service. I’d also like you to understand the type of account that you are supposed to open and not see your bank just as a place where you put the money. The bank is a financial institution out to keep money. That calls for them to protect their clients, but then there’s also the part where they do need to make money themselves. If you look at the pros and cons of what they offer compared to what you want, you should be in the best shape when you do open a business.
The first account I’d like to talk about is called a Business Current Account, this is basically an account where you put money on the bank for future use. Wikipedia describes it as:
A deposit account held at a bank or other financial institution, for the purpose of securely and quickly providing frequent access to funds on demand, through a variety of different channels. Because money is available on demand these accounts are also referred to as demand accounts or demand deposit accounts.
Transactional Account or Demand Deposit Account (DDA) or Current Account is primarily meant for businessmen, firms, companies, public enterprises etc. that have numerous daily banking transactions. Current Accounts are meant neither for the purpose of earning interest nor for the purpose of savings but only for convenience of the business, hence they are non-interest bearing accounts. In a Current Account, a customer can deposit any amount of money any number of times and permit unlimited number of withdrawals, subject to availability of funds.
There is another bank account that you might want to check called a Business Savings Account, which wikipedia describes as:
Savings accounts are accounts maintained by commercial banks, savings and loan associations, credit unions, and mutual savings banks that pay interest but can not be used directly as money (by, for example, writing a cheque). These accounts let customers set aside a portion of their liquid assets that could be used to make purchases while earning a monetary return.
So really what these two accounts mean is that a Business Current Account allows you to access money easily where it is available but it does not earn interest whereas a Business Saving Account has limiting access but will earn interest for you. For you this means if you withdraw alot, or if your money is fluid, you might want to get a Business Current Account. And if your cash is something that you use only for paying employees or rent, then it might be best to get a Business Savings Account.
Now, I also mentioned the banks and the importance of where to create an account. I’d like to recommend, if you’re from the UK, to use Alliance-LeicesterCommercialBank.co.UK for your business banking. You’ll just have to drop by their site to know how reliable they are and what features they have to benefit your business. Drop by now and get the money flowing this 2008.