Skip to main content

IIFL Finance will never request any extra fees during the loan process. Any applicable charges will be deducted directly from the Loan Account

IIFL Finance - Logo
    • Sign In
    • Quick Pay
  • Business loan
  • Gold loan
  • Home loan
  • Rates and charges
  • EMI calculator
  • Finance
  • Process and documents required
  • Repayment
Main navigation
  • Gold Loan
    • Apply For Gold Loan
    • Gold Loan At Home
    • Gold Loan Calculator
    • Rates and Charges
    • Gold Loan Repayment
    • Process & Documents Required
    • Agriculture Gold Loan
    • Education Gold Loan
    • Gold Loan For Women
    • Gold Loan For MSME
    • Gold Auction
    • Partners
  • Business Loan
    • Apply For Business Loan
    • Business Loan Calculator
    • Rates and Charges
    • Process & Documents Required
    • Repayments
    • Partners
    • Business Loan Eligibility
    • Business Loan for Manufacturers
    • Business Loan for women
    • E-commerce Business Loans
    • Supply Chain Finance
  • MSME
    • MSME Loan
    • MSME Knowledge Center
  • Others
    • Credit Score
    • Loan Against Securities
    • Secured Business Loan
    • Digital Finance
    • Samasta Microfinance
    • Livlong
    • Co-lending Partners
    • One Home (Property for Auction)
    • Calculators
    • Sign In
    • Quick Pay
  • Business loan
  • Gold loan
  • Home loan
  • Rates and charges
  • EMI calculator
  • Finance
  • Process and documents required
  • Repayment
    • Sign In
    • Quick Pay
  • About Us
  • Investor Relations
  • ESG Profile
  • CSR
  • Careers
  • Reach Us
    • ‌‌ Locate Us
    • ‌‌ Raise a Request
    • ‌‌Contact Us
  • More
    • News & Media
    • Blogs
    • Partners
  1. Home
  2. Blogs
  3. Publisher Blogs
  4. Current versus Savings: Does My Account Impact Business Loan?

Current versus Savings: Does My Account Impact Business Loan?

9 Sep, 2022 14:56 IST 22 Views
Current versus Savings: Does My Account Impact Business Loan?

A person or a business needs to have one or more bank accounts to manage financial affairs. A bank account is not just an official channel for financial transactions but is also a mode of savings and investments.

A small unorganised business does depend on cash as a mode of conducting operations, and there are millions of such small entities and self-employed service sector personnel. But even they are being slowly brought under the formal financial economy. With regulatory norms prescribing the maximum limit for cash transactions, many small businesses have now switched to a formal banking channel.

A bank account can be basically of two kinds: savings and current. Businesses in general are offered a current account while individuals usually opt for a conventional savings account.

Basic Differences Between Current And Savings Account

A conventional savings account also doubles up as a way to grow savings through interest payments on the deposits. At the same time, these accounts require a minimum deposit to be maintained as part of the offering, although some banks do offer zero minimum balance savings accounts.

Current accounts are meant for entities who do high-frequency financial transactions. It is meant for traders and businesses at large. It doesn’t provide any interest payments on the outstanding deposits but allows multiple cheque transactions as against limitations for the same for a savings account.

Type Of Bank Account And Business Loan

Businesses are typically offered current accounts by default. Although some banks have started offering ‘business savings accounts’ with interest payments, most businesses still have only a current account as their primary banking channel.

Such current accounts also offer an overdraft facility, which is a form of debt that allow a business entity to take out more money than what it has in the form of deposits in the account.

That said, when it comes to availing a business loan, lenders insist on the borrower entity having a current account. This helps it differentiate from a savings account where the money can be taken out at will even for personal use.

In effect, a current account also gives legitimacy to a business enterprise and is seen as a professional organisation, both in the eyes of its clients as well as financial partners or lenders.

Lenders do ask for current account details of the business for which a loan is being availed. In the absence of a current account, a businessperson can take a business loan at a cheaper rate while using it as a personal loan. Since lenders underwrite a business loan based on their assessment of the business to generate enough cash for repayments on time, they would look for the bank’s current account statement associated with such entities.

Conclusion

A business enterprise by default is offered a current bank account as against a savings account, which is the conventional form for banking for an individual.

Most lenders insist on a current bank account statement of the main enterprise to gauge the legitimate business and thereby requires associated documentation before sanctioning a business loan.

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

Related Tags
Most Read
100 Small Business Ideas to Start in 2025
8 May, 2025 11:37 IST
150388 Views
Check the Difference Between 24k and 22k Gold
18 Jun, 2024 14:56 IST
124761 Views
₹10000 Loan on Aadhar Card
19 Aug, 2024 17:54 IST
3066 Views
How much is 1 Tola Gold to Gram?
15 Sep, 2023 15:16 IST
2943 Views
Get in Touch
‌ By clicking on Apply Now button on the page, you authorize IIFL & its representatives to inform you about various products, offers and services provided by IIFL through any mode including telephone calls, SMS, letters, whatsapp etc.You confirm that laws in relation to unsolicited communication referred in 'National Do Not Call Registry' as laid down by 'Telecom Regulatory Authority of India' will not be applicable for such information/communication.

Related Blogs

What Are Prepayment Charges On Business Loans?
Publisher What Are Prepayment Charges On Business Loans?

Business loans can have a long tenure. However, t…

91 1548min read
How Can I Improve My CIBIL Score To Get A Business Loan?
Publisher How Can I Improve My CIBIL Score To Get A Business Loan?

Increasing revenue and profits are essential for…

84 890min read
The Top Benefits Of Having A Good Business Credit Score
Publisher The Top Benefits Of Having A Good Business Credit Score

A credit score determines your creditworthiness b…

70 738min read
Ten Things You Should Look For In A Credit Card Statement
Publisher Ten Things You Should Look For In A Credit Card Statement

A credit card is an excellent form of unsecured b…

45 1464min read
Quick Links
  • Gold Loan
  • Business Loan
  • Gold Loan At Home
  • Blogs
  • Media
  • News
  • Credit Score
  • Home Loan
Quick Links
  • Gold Loan
  • Business Loan
  • Gold Loan At Home
  • Blogs
  • Media
  • News
  • Credit Score
  • Home Loan
Calculators
  • Credit Score
  • Business Loan Calculator
  • Gold Loan calculator
  • GST Calculator
  • Gold Rate
Finance
  • Gold Loan At Home
  • Business Loans
  • MSME Loan
  • Agriculture Gold Loan
  • Education Gold Loan
  • Gold Loan For MSME
  • Gold Loan For Women
  • Secured Business Loan
  • Auction
Easy Access
  • About us
  • Awards
  • Blogs
  • Careers
  • CSR
  • Investors
  • Partners
  • ODR Portal
Need Help
  • Locate Us
  • Business Loan Locate Us
  • Gold Loan Locate Us
  • Support
  • National Pension Scheme
Resources
  • Co-Lending Policy
  • Interest Rate & Charges Policy
  • Fees & Charges
  • Whistle Blower / Vigilance Policy
  • Fair Practices Code
  • Release of Movable and Immovable Property Documents
  • KYC Policy
  • Exclusion List
  • Corporate Governance
  • Nomination And Remuneration
  • Grievance Redressal Procedure
  • Related Party Transaction
  • Investor Relations
  • Digital Initiatives
  • Advisory
  • Anti-Bribery and Anti-Corruption Policy
  • Ombudsman Scheme
  • Policy on Resolution framework 2.0
  • Customer Awareness - SMA Account Classification
  • Recovery Agencies & DSA
  • Terminated Service Provider
  • Secured Assets possessed under SARFAESI Act
  • Statutory Auditor Policy
  • Benefits of updating Mobile Nos./ E-mail IDs with IIFL Finance Limited
  • Customer Safety & Fraud Prevention Resources
Groups and Subsidiary Companies
  • IIFL Capital
  • Samasta
  • IIFL Home
  • Open Fintech
Connect with us
  • ‌
  • ‌
  • ‌
  • ‌
IIFL Loans App
Android App Icon - IIFL Finance IOS App Icon - IIFL Finance
  • Privacy Policy
  • Terms And Conditions
  • Disclaimer
  • Sitemap
Copyright © 2025 IIFL Finance Limited. All rights Reserved.
Get a Loan
Apply Now