Manage a current account to unlock cash flow and savings benefits

Managing finances efficiently and finding ways to save money are essential life skills. While savings accounts are the go-to savings instrument for individuals, they fall short for businesses that prioritise operational flexibility. This is because savings accounts often impose transaction limits and lack the advanced features necessary to support a business's financial demands.

To address this issue, banks offer current accounts that allow you to perform unconstrained transactions and avail of numerous banking services on the go. These accounts are designed for businesses to make bulk payments, but the question is, can you save money with a current account? Let us explore some proven tips to manage your current account to save money.   

What is the use of a current account?
 

To manage your current account effectively and save money, you must first understand the use of a current account. Unlike savings accounts, current accounts are designed to facilitate daily transactions. While they typically do not offer interest on the balance, they provide a higher degree of flexibility regarding withdrawals, deposits, and fund transfers. 

In addition, current accounts come with features, such as free chequebooks (depending on the specific current account variant you opt for), debit cards, online account access, free statements, e-mandates, and an overdraft facility to keep funds handy for smooth business operations. You can leverage these features to manage your account efficiently and save more on banking charges and transactions.  

Benefits of a current account
 

A current account offers numerous advantages that help businesses and individuals manage their finances seamlessly. By understanding the benefits of a current account, you can optimise its usage for efficient financial operations.

1. Cash flow management
 

One of the key benefits of a current account is improved cash flow management. With unlimited withdrawals and deposits, businesses can handle daily transactions without restrictions, ensuring smooth operations and financial stability.

2. Overdraft facility
 

A current account often provides an overdraft facility, acting as a safety net when expenses temporarily exceed the available balance. This feature ensures that critical payments are not disrupted during cash shortages.

3. Seamless transactions
 

Current accounts allow unlimited transactions, making them ideal for businesses requiring frequent fund transfers, payments, and deposits to manage day-to-day operations efficiently.

4. Online banking convenience
 

With robust online banking features, a current account provides the flexibility to monitor and manage transactions in real time. This benefit allows you to access your account anytime and make informed financial decisions on the go.

5. Higher transaction limits
 

Unlike savings accounts, current accounts offer higher transaction limits. For example, IDFC FIRST Bank Current Accounts provide free cash deposit limits of 10 to 15 times the current month’s Average Monthly Balance (AMB), ensuring businesses can handle substantial cash deposits without extra charges.

By leveraging the benefits of a current account, businesses can ensure financial efficiency while streamlining their daily operations.

Can you save money with a current account?
 

Current accounts are not primarily designed for saving purposes. Banks offer savings accounts, a separate product designed to help you meet your saving goals. Meanwhile, current accounts serve as a routine cash flow management platform rather than a vessel for accumulating interest. However, this does not negate the possibility of adopting strategies to make the most of your current account and save money effectively.

Here are some tips for managing your current account to save money –

1. Regularly review your statements
 

Review your bank statements regularly to draft an effective savings plan according to your financial objectives. This practice helps identify unnecessary expenditures, ensures transaction accuracy, and keeps you well-informed about your financial standing. With IDFC FIRST Bank, you get a detailed online banking interface that makes accessing and reviewing your statements anytime quick and hassle-free.

2. Leverage online banking
 

Leverage the convenience of online banking to monitor your account in real time. Setting up alerts for transactions, low balances, or upcoming bills allows you to stay ahead of your financial commitments. IDFC FIRST Bank provides robust internet and mobile banking platforms, making tracking transactions and receiving instant notifications easy for better financial management.

3. Take advantage of your account’s specific features
 

Make sure to opt for a bank that offers current accounts with unique features that can help you manage your finances easily. For instance, IDFC FIRST Bank offers the BRAVO feature with all its current account variants, through which you can automatically convert your current account balance above ₹2 lakhs into a 370-day fixed deposit. This helps you earn an interest of 7.25% per annum. 

4. Explore cashback offers
 

Many current accounts provide cashback rewards on specific transactions. Identifying and capitalising on these opportunities can be a small but effective way to recoup some of your regular spending. For example, IDFC FIRST Bank Debit Cards, provided with all current account variants, may offer cashback or savings on eligible transactions, helping you cut costs effortlessly.

5. Optimise overdraft usage
 

Overdraft facilities can serve as a financial cushion during cash flow shortages, helping you avoid penalties or disruptions caused by delayed payments. With the IDFC FIRST Bank Current Account's BRAVO facility, balances above ₹2 lakhs are converted into fixed deposits, which can then be used to secure an overdraft. This allows you to manage short-term financial gaps while continuing to earn interest on your savings.

6. Set realistic budgets
 

Establishing a budget is paramount for effective financial management. Categorise your expenses, set realistic limits, and adhere to them diligently. IDFC FIRST Bank Current Accounts offer payment and collection solutions to help streamline cash flows, allowing you to allocate funds efficiently and stick to your financial plan.

7. Compare current account options
 

Different banks offer different features and benefits for their current accounts. Regularly reviewing your account against other options in the market ensures you're getting the best value for your specific financial needs. IDFC FIRST Bank lets you compare the different current account variants, which helps you choose a specific account that suits your business needs.

8. Consider the fees and charges
 

A comprehensive understanding of the fee structure associated with your current account is crucial. This includes transaction fees, ATM charges, and any penalties for non-compliance. IDFC FIRST Bank Current Accounts offer zero charges on NEFT, RTGS, and IMPS transactions (with AMB maintenance), helping you reduce routine banking costs significantly.

Factors to consider while managing your current account
 

When you decide to open a current account online, you must keep a few factors in mind, such as –

1. Transaction limits
 

Keep track of any transaction limits imposed by your bank and plan your expenses accordingly to avoid inconveniences.

2. Security measures
 

Strengthen the security of your online banking by adopting robust passwords and enabling two-factor authentication. This extra layer of protection enhances the overall safety of your financial transactions.

3. Customer support
 

Assess the quality of customer support provided by your bank. Prompt and effective assistance can be invaluable in times of need, ensuring that any issues are addressed swiftly and efficiently.

Conclusion
 

Managing your current account to save money requires diligence and demands vigilance, strategic planning, and the adept use of the features offered by your bank. While a current account may not be the conventional choice for savings, with the right approach, it can serve as a valuable tool for financial stability.

Explore the range of current accounts offered by IDFC FIRST Bank to find one that aligns with your business needs and enhances your financial management.