Current Account

Current Account Monthly Average Balance and Withdrawal Limit 2020

What is Current Account?

Current account is a transaction bank account for businessmen, professionals and firms to enable them to conduct a high number of daily monetary transactions. The account can be opened and operated by a single person, jointly by multiple individuals or in the name of a business. Current Accounts are nil interest rate accounts with a higher minimum account balance requirement as compared to Savings Account. Current Accounts are designed to offer transaction facilities for smooth running of a business.

Features and Benefits of Current Account

• Current Account is a zero interest rate account
• Offers option to avail overdraft facility and unsecured loans to meet seasonal working capital requirements
• Allows unlimited withdrawals from home branch and up to a certain limit from elsewhere
• Can be operated by individuals, proprietors, public and private companies, trusts, NGOs, etc
• Has multiple direct payment facilities such as free cheque leaves, demand drafts, pay orders, RTGS, NEFT etc

Current Account Opening Procedure

Current Account opening process requires a close comparison of Current Account offers of all banks to be able to choose the best Current Account with low minimum balance requirements and significant transaction facilities. The process to open a Current Account has been explained in simple steps below:

• Choose a Bank: Compare and select a bank which has the best customer service and offers the best transactional facilities. You can evaluate a bank on its net banking facilities, loan and overdraft facilities, free cheque books, location of base branch, etc.
• Choose a Current Account Type: Banks offer a variety of Current Account types designed to meet the requirements of various types of businesses. Pick the one type that is best for your business. Contact customer care of the selected banks, resolve all your queries and compare their Current Account on important parameters.
• Visit the nearest branch: Once you have shortlisted 2-3 banks and the type of Current Account you would like to open, visit the branch that is nearest to you. Collect the Current Account opening form and get an understanding of the account opening process, documents to be submitted and account features.
• Documentation: Go through all terms and conditions and submit the required documents along with the application form. The documents generally are your address proof, identity proof, photographs, PAN Number and Declaration in Form 60 and 61 as per the Income Tax Act, 1961. For business accounts, copy of the Business Registration, the Memorandum of Association and Article of Association duly certified are to be submitted for opening a Current Account for a company or a firm.
• Good to go: Along with the paperwork, the bank might also ask for a reference who introduces you to the bank, if you aren’t a customer with them already. After that, the bank will hand over your Current Account kit with all details.

How to Open Current Account Online?

Apart from the offline methods, the current account can also be accessed online. Through the online platforms, you can compare the current account interest rates of various banks and choose one that meets your convenience.
After choosing a bank, you need to log in to the selected bank's website and choose the open current account option. The online current account portals provide instant current account opening, with quick documentation and easy eligibility match. In comparison to the offline process, the online process is time-saving and efficient.

Types of Current Account

There are certain types of Current Accounts that are typical to all banks offering this service:

• Standard Current Account: This type of Current Account has a monthly average balance requirement, offers cheque leaves, overdraft facility and debit cards, net banking, SMS banking etc.
• Single Column Cash Book: This type is more of a cashbook that allows transaction but doesn’t offer other features such as overdraft facility. It records daily transactions under separate debit and credit columns.
• Packaged Current Account: As the name suggests, this type of Current Account offers packaged features such as medical support and travel insurance.
• Premium Current Account: It offers premium services, offers and benefits with a range of customized features for its high end customers.
• Foreign Currency Accounts: These accounts are for individuals or businesses that require huge foreign currency transactions to be carried out frequently.

Documents Required to Open a Current Account

The list of documents required to open a Current Account may vary from bank to bank. Here are some generic documents that you may require to open a current account:

• Address Proof: Rent Agreement, Bank Statement, Voter ID Card, Ration Card, Passport, Driving License, Utility Bills (water, electricity, etc.)
• Identity Proof: Passport, Aadhaar Card, PAN Card, Driving License, Voter ID Card, Employee Identity Card (in case of government employees).
• Business Ownership Documents: Partnership Deed (in case of Partnership Firm), MOA & AOA (in case of Companies), A cheque for opening bank account, Address Proof of the Firm Certificate of Incorporation, Certificate by Sales Tax or Service Tax authorities (in case of Proprietorship Firm), Photograph.

Difference between Current Account and Savings Account

FAQs on Current Accounts