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7 minutes read
26 October 2024
Selecting the best business bank account can transform your financial operations. For Indian entrepreneurs with global clients, choosing a bank that supports international transactions, provides competitive foreign exchange rates, and robust online banking is crucial.
This guide reviews the best business banking for a small business, highlighting the top offerings from ICICI Bank, Kotak Mahindra Bank, and HDFC Bank. We compare business accounts to help you decide the best business account for your needs, including features like foreign exchange services and payment gateways.
What services does business banking offer?
Business banking accounts are a service provided by a bank to small to large companies. They typically offer a range of services, including:
- Checking accounts
- Savings accounts
- Credit cards
- Loans
- Merchant services
- Online banking
- Mobile banking
- Customer support
- Trade finance
- Foreign exchange
- Wealth management
- Cash management
- Business credit cards
- Overdraft protection
- Business credit lines
Top 3 banks for small and medium-sized businesses
ICICI
ICICI Bank offers a range of features tailored to meet the needs of small and medium businesses. With their Smart Business Account Gold, you can enjoy free cash deposits of up to Rs. 2.5 crore, depending on your maintained Monthly Average Balance (MAB). This account also provides seamless access to InstaBIZ and Corporate Internet Banking, allowing you to manage your finances on the go.
One standout feature is the InstaBIZ app, a comprehensive mobile banking solution for business customers. It lets you access your accounts, make transactions, and even apply for instant overdrafts and business loans. The bank also offers Connected Banking, an integrated platform that combines banking and accounting solutions to streamline your financial operations.
ICICI's pricing
ICICI Bank's pricing structure for business accounts is competitive. Most urban branches require a minimum Quarterly Average Balance (QAB) of Rs. 1,00,000. However, this requirement is reduced to Rs. 50,000 for select semi-urban and rural branches, making it more accessible for businesses in these areas.
The bank offers several ways to waive the QAB requirement, including maintaining active transactions on their Digi Pack, achieving a Connected Banking throughput of Rs. 25,000 for the quarter, or having an active auto-debit for asset-linked EMI in the account.
ICICI Bank provides wire transfer services for outward remittances, allowing businesses to transfer funds from their accounts to beneficiary accounts across the globe. While specific fees for wire transfers are not mentioned in the provided search results, it's common for banks to charge a fee for this service.
For businesses involved in import and export, ICICI Bank offers a special One Globe Trade Account. This account provides preferential pricing for trade transactions, which can be beneficial for businesses with frequent international dealings
ICICI's pros and cons
| Aspects | Details |
|---|---|
| Pros | - Dynamic free limits for cash and non-cash transactions based on MAB maintained |
| - Free NEFT/RTGS transactions through online channels or at branches | |
| - Complimentary Gold Business Banking Debit Card | |
| Cons | - Relatively high minimum balance requirements compared to some other banks |
| - Complex processes for opening accounts and applying for loans | |
| - Lower interest rates on deposits compared to some public sector banks |
Kotak Mahindra
Kotak Mahindra Bank offers a range of features tailored for small and medium businesses. Their Current Account options come with benefits designed to streamline your financial operations. You can enjoy free cash deposits up to Rs. 7.5 Lakhs per month at all home city branches, making it convenient to manage your cash flow. The bank also provides free cheque pickup once a day, saving you time and effort.
For businesses with international clients, Kotak Mahindra Bank offers free collection of funds through NEFT and RTGS. You can also make free RTGS, NEFT, and DD transactions up to Rs. 50 Lakhs per month through their branches. This feature is particularly beneficial for companies dealing with foreign exchange and international payments.
The bank's digital offerings include Kotak fyn, a one-stop digital enterprise portal that enables paperless transactions, providing you with a seamless experience . This online banking solution can help you manage your accounts efficiently, especially if you're running a startup or a small business that relies heavily on digital operations.
Kotak Mahindra's pricing
Kotak Mahindra Bank's pricing structure for business accounts is competitive. To maintain an Advantage Current Account, you need to keep an average balance of Rs. 50,000 per quarter. If you fail to maintain this balance, a nominal charge of Rs. 2,000 per quarter plus service tax applies.
The bank offers several free services with their current accounts, including unlimited self-cash withdrawals at all ING branches and free local and outstation cheque payments. These features can help you save on transaction costs, which is particularly beneficial for small businesses and startups looking to a minimum.
The bank charges a small business account a cross-currency mark-up of 3.5% on foreign currency transactions carried out on Debit Cards.
The bank charges Rs. 500 per bill for standard outward remittances. However, the processing fee is reduced to Rs. 500 per transaction when using online remittance through Kotak Mobile Banking or Net Banking.
Additional charges:
- SWIFT charges: Free
- Foreign Bank Charges (OUR): Rs. 750 per message
- Courier Charges - International: Rs. 500
- Courier Charges - Domestic: Rs. 100
Global Trade Account: Kotak Mahindra Bank offers a Global Trade Account specifically designed for importers and exporters. This account comes in three variants - GTA Pro, GTA Elite, and GTA Ace - with different quarterly throughput requirements and varying fee structures
Kotak Mahindra's pros and cons
| Features | Pros | Cons |
|---|---|---|
| Remittances | Free remittances limit across more than 200 cities, up to Rs. 25 lakhs per month | - |
| Fund Transfers | Free unlimited transfer of funds within the bank | - |
| Debit Card | International Titanium Master Card with high ATM withdrawal limit | - |
| Banking Access | 24/7 access to Phone Banking and Net Banking | - |
| Minimum Balance | - | Relatively high minimum balance requirement |
| Balance Maintenance | - | Charges for non-maintenance of minimum balance |
| Cash Deposit Limit | - | Limited free cash deposit limit compared to competitors |
HDFC
HDFC Bank offers a range of features tailored for small and medium businesses. Their current accounts come with benefits designed to streamline your financial operations. You can enjoy free cash deposits up to Rs. 50 lakh per month at all home city branches, making it convenient to manage your cash flow. For businesses with international clients, HDFC Bank provides free collection of funds through NEFT and RTGS.
The bank's digital offerings include SmartHub Vyapar, a comprehensive solution that allows you to accept payments, get instant loans, and manage digital business payments. This online banking platform can help you manage your accounts efficiently, especially if you're running a startup or a small business that relies heavily on digital operations.
HDFC's pricing
HDFC Bank's pricing structure for business accounts is competitive. To maintain a current account, you need to keep an average balance that varies depending on the account type. The bank offers several free services with their current accounts, including unlimited self-cash withdrawals at all branches and free local and outstation cheque payments.
For international payments, HDFC Bank provides a comprehensive suite of services. They offer outward remittances in 22 different currencies through SWIFT, with charges starting from Rs. 500 for transactions up to USD 500 or equivalent and Rs. 1000 for transactions above USD 500. The bank also provides inward remittance services at no charge, making it easier for businesses to receive international payments. Additionally, HDFC Bank charges a cross-currency mark-up of 3.5% on foreign currency transactions carried out on Debit Cards.
When comparing business accounts, HDFC Bank stands out as one of the best options for small businesses. Their business bank accounts offer competitive pricing, free services, and international transaction capabilities.
HDFC's pros and cons
| Features | Pros | Cons |
|---|---|---|
| Network | Wide network of over 6,000 branches and 17,000 ATMs across India | - |
| Financial Stability | Strong financial position with high capital adequacy ratios | - |
| Interest Rates | Competitive interest rates on savings accounts and term deposits | - |
| Account Opening | Easy account opening process, both online and offline | - |
| Minimum Balance | - | Relatively high minimum balance requirements for some account types |
| Fee Structure | - | Complex fee structure that may be challenging for small businesses to navigate |
Neobanks
Neobanks are revolutionizing the banking landscape, offering digital-first solutions for businesses with international clients. These online-only banks provide convenient and innovative services, often with lower fees and better exchange rates than traditional banks.
Wise
Wise Business offers a multi-currency account that allows you to send, receive, and spend money in over 70 countries. With transparent fees starting from 0.43% for currency conversion and no monthly charges, it's an attractive option for small businesses. Wise also provides local account details in multiple currencies, making it easier to get paid like a local.
Payoneer
With its multi-currency account, Payoneer caters to freelancers, small business owners, and e-commerce stores. You can hold and manage 9 currencies and get paid out in 190 countries using 70 currencies. Payoneer is particularly useful for marketplace sellers, being compatible with 2000+ platforms.
Winvesta
Winvesta focuses on helping Indian businesses receive international payments. They offer global collection accounts with US ACH, UK account numbers, Euro IBAN, and CAD receiving accounts. Winvesta doesn't charge fees for account setup, maintenance, or receiving wire transfers, making it an excellent choice for freelancers and small businesses.
Choosing which bank is best for business accounts can make a big difference for Indian entrepreneurs with global clients. Each top bank has its own set of pros and cons when it comes to features, pricing, and digital capabilities that cater to small and medium businesses.
For those seeking even more flexibility, neobanks like Wise, Payoneer, and Winvesta are shaking things up in the banking world. These digital-first options often have lower fees and better exchange rates compared to traditional banks. They're worth considering for businesses that need to send, receive, and manage money across borders easily. In the end, the best choice depends on your specific business needs and priorities when it comes to international banking services.
Small financial savings lead to big wins for your business!
- Collect from 130+ countries.
- Local USD, GBP, CAD, EUR accounts.
- Free FIRA
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Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute financial or legal advice. The details regarding bank services and features are accurate as of 2024 and are subject to change. Readers should verify the current terms and conditions with the respective banks before making any decisions. The blog's author or platform does not endorse any specific bank or financial product mentioned. Users are advised to conduct their own research and consult with financial experts to tailor advice to their specific circumstances. Usage of any information from this blog is solely at the reader's own risk.
