Nowadays many businesses have an e-commerce platform and the money moves across customers, vendors, partners, etc.
Because of this having an account from nodal, escrow, or current accounts becomes important.
These accounts help business owners in handling complex payments.
What are nodal, current, and escrow accounts?
Nodal account
A Nodal account is mandated by the Reserve Bank of India and is used by businesses that act as intermediaries (collects money online on behalf of the vendor).
Nodal accounts help with timely payments to vendors.
Current account
A current account is the most common account which is used by businesses. Businesses that carry out huge amount of bank transactions use current account.
There is no limit on the number of transactions with a current account.
If your business also goes through large payments, the current account is ideal.
Cheque book facilities, internet banking and mobile banking are the services that you get with a current account.
Escrow account
An escrow account is a temporary account by a third party on behalf of the other two parties (buyer and seller) until the transaction is completed.
The escrow account has the funds until a written or oral communication is received or until the involved party fulfills the obligations.
Escrow accounts can be opened with any bank and is usually applicable for real estate businesses.
Escrow accounts are secure and also helps in keeping a record of transactions.
It can be used for a large number of transactions.
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