Right after incorporating your start-up, the next thing that you would need is a Current Account in a bank. Most people think that the bank they chose is irrelevant and would not change anything. But do not be fooled. There are nuances to banking and the ban that you chose for your startup is important.
Now wherever you go, whichever bank it may be, the customer service is the same. It is a prejudice, especially in India that private banks have better services. While there are differences in the two and the one that you chose may make or break your start-up.
But whatever it may be, the thing common in all the banks is that they do not care much for start-ups. Because most start-ups fail. And at the end of the day, no matter how friendly the bank promotes itself to be, they all are in it for the profit.
The reason that I state this as a point you keep in mind is because it matters. Minimum balance is important. If your account is in a bank that has a high minimum balance, you will have more of your funds are blocked. Being a start-up, you cannot afford to have a high amount of your initial money blocked elsewhere.
Not just that, if you end up spending a little more, the fines charged by the banks are more too. It is foolish to keep a major chunk of your money locked up and having to pay fines for using the least bit of the locked up money.
While the minimum balance requirement in Government banks is around Rs. 10,000, in privately run banks it is Rs. 25,000.
Now before you jump in, take time to visit and try to develop a personal relationship with the bank manager. If the manager isn’t available, come back with an appointment and have a chat about your start-up. A good relationship with the Manager will take you a long way when you want to grow your business.
If a sales agent tries to open your account entirely without having to speak to the manager, beware. This is red a flag. Try another branch before you commit your time because on many instances personally, that has been a problem later.
Golden Rule – don’t do business if the business head doesn’t make you time when asked for an appointment.
Always go and ask about the services that the bank provides. Do not go by the online ads or the spam emails that you keep getting. And remember, stay as far as you can from zero balance account. For all I know, Zero balance accounts is the Loch-Ness Monster.
Also Read: Pros and Cons Of Setting Up A Startup Alone
Lastly, read the terms and conditions of the Bank carefully. Current account does not get you interest. Not maintaining the required minimum balance may result in fines. Not just that, there are a lot of other reasons that may lead into you being fined. Know what your duties are as an account holder and what you can expect from your bank. And the only way to do so is to read the fine print.