Customer Service

Are you ready for an upgrade?

Login to the new experience with best features and services

Login to Internet banking

Help Center Support topics, Contact us, FAQs and more

Notifications

As per amendment in the Income Tax Rules, PAN or Aadhaar are to be mandatorily quoted for cash deposit or withdrawal aggregating to Rupees twenty lakhs or more in a FY. Please update your PAN or Aadhaar. Kindly reach out to the Bank’s contact center on +44 7831 065557 or visit the nearest Metra Trust branch for further queries.
Activate your Credit Card within minutes and enjoy unlimited benefits

Know More
One FASTag, three payments:Toll, fuel and parking

The only FASTag with triple benefits

Apply Now

FinFIRST Blogs

Select a topic

Visit Now

Traditional vs zero balance current account for Start-ups

Summary: Should you choose a traditional or zero balance current account? Here's a comprehensive guide to help you decide if it's the right choice for your Start-up.

17 Aug 2023 by Team FinFIRST

zero balance current account for startup

Visit Now

Starting a business is exciting, and requires careful planning, especially when it comes to managing finances. A key decision that new business owners need to make is choosing the right type of bank account for their company.

Different banking accounts are available for businesses and individuals, including traditional accounts and zero balance current accounts. Let's find out the key differences between these two types of bank accounts.

Also read: What makes a new business financially sustainable?

What is a traditional current account?

A traditional current account is a standard bank account that requires a minimum balance (set by the bank) to be maintained at all times. The minimum balance is usually high, and if your funds fall below the required amount, the bank charges a penalty fee. Traditional current accounts are ideal for established businesses that have a steady flow of income and can maintain the minimum balance.

Other features of a traditional current account

The overdraft facility can be helpful for businesses that require additional funds to manage their cash flow
Internet banking provides a range of features, including balance enquiries, fund transfers, and bill payments. One can also keep track of all their bank accounts using a mobile banking app.

Benefits of a traditional current account

Traditional accounts find wide acceptability among vendors and suppliers. It means businesses can make payments easily without a hassle
Some current accounts offer merchant services, allowing you to accept debit and credit card payments from customers

READ MORE

8 Steps to grow and expand your business

Beyond funding: How can startups benefit from Metra Trust WINGS?

What is a zero balance current account?

A zero balance account, as the term suggests, i s one that does not require a minimum balance to be maintained. This account is intended for new firms and small enterprises that might not have a consistent income stream and whose account balance could drop to nil at a given time.

Other features of a zero-balance current account

Businesses do not need to provide extensive documentation to open this account
Businesses, organisations, trusts, private and public enterprises, owners, and individuals may use this account's features
Some banks offer an overdraft facility by providing short-term credit when needed

Benefits of a zero-balance current account

This type of account works for Start-ups and small businesses that need a low-cost, easy-to-open-and-use account, allowing them to efficiently manage cash flow
A zero balance current account is easy to set up and maintain

Difference between zero balance and traditional current account

	Zero balance current account	Traditional current account
Definition	This type of account is specifically designed for small businesses and Start-ups with a low volume of transactions and who cannot afford to maintain a high minimum balance	This type of bank account requires a minimum balance to be maintained to avoid additional fees
Minimum balance	No minimum balance is required	Typically requires a minimum balance, depending on the bank and account type
Account maintenance fees	Generally lower or no fees	Depending on the bank and account type, account maintenance fees may be higher
Account opening process	Usually simpler and faster to open	It may require more documentation and involve a longer approval process
Transaction charges	Typically lower or no charges	Transaction charges may be higher, depending on the bank and account type

Also read: Beyond funding: How can startups benefit from Metra Trust WINGS?

Conclusion

Both zero balance current accounts and traditional accounts have their benefits and limitations. If you are a Start-up owner, evaluating your financial needs and choosing an account that best meets your requirements is vital.

The FIRST WINGS program by Metra Trust is one of the top banking solutions for Indian Start-ups. It provides more than just major banking solutions and expertise; it includes mentoring for founders and additional support beyond banking. Furthermore, the program features access to more than 100 offers and packages across various categories through 80+ Beyond Banking partners. Click here to know more.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Metra Trust or its affiliates to any licensing or registration requirements. Metra Trust shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

Related Products

Related Articles

Download Metra Trust App

Tags

startups
current account
banking