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WHAT TYPE OF BANK ACCOUNT IS RIGHT FOR YOUR BUSINESS?

Current accounts and Savings accounts are the two most common types of bank accounts that Nigerian banks offer. What exactly is the difference between these two account types and which one is right for your business?

A lot of people don’t really know the benefits that each type of account offers. As a result, they could be missing out on the ideal account for their business. This post intends to show major differences between these two types of bank accounts in order to help business owners decide what account type is right for them.

Current Accounts

Current accounts are meant for frequent or regular transactions. They are suitable for people who do frequent money transfers. For example, businessmen, firms, companies, organizations, public enterprises, etc.

  • Current Accounts are called “current accounts” because they are used for regular transactions.
  • This type of account is suitable for firms, companies, public enterprises, businessmen and the like.
  • Currents accounts do not earn any interest because they are very fluid.
  • Current accounts usually do not have a limit for the number of transactions they carry out.

Savings Accounts

Savings accounts are designed for people who do not need to carry out frequent and heavy transactions. They’re meant for people who save. The ideal people that savings accounts are suited for are salary earners, and people with short-term financial goals like financing a vacation, financing a wedding, buying a car etc.

  • The primary purpose of a savings account is to help you save.
  • The owner of the account is allowed to deposit money whenever it’s convenient for him, and he earns interest on the money in his account.
  • A savings account could be an individual account or joint account and the account holder is usually required to maintain a prespecified minimum balance.
  • Savings account interest rate earnings range from 4% to 6%.

Okay, so what type of bank account is best for me?

Business owners have different requirements for their business. These requirements would influence their bank account type preferences.

Savings accounts and current accounts meet different financial needs. It all depends on the preferences and requirements of the account holder, or intending account holder. Current accounts are better for managing daily transactions, while savings accounts are better for managing less frequent transactions and for saving cash. Just knowing this would guide your decision of what type of account is best suited for you.

All the best in your business!

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