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.

• 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 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.

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.

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.

Current Account

Saving Account

Current Accounts are best for businessmen and self-employed for regular business transactions Minimum age to open Current Account is 18 years No interest is earned on Current Account No limit on number of monthly transactions A high amount is to be maintained as minimum balance in this account Overdraft facility is available to withdraw more than the available amount in his account

Savings Account is best for salaried people as monthly savings account with some level of transaction facilities Savings Account with some level of transaction facilities No minimum age to open Savings Account. Can be opened by minors as well Interest earned on savings can be up to 7% and can vary from bank to bank Limited number of free transactions in a month Minimum amount requirement is lesser that that in Current Account Overdraft facility is not available. However, some banks offer this facility to account holders who have salary account with them

The Reserve Bank of India on December 14 allowed exemptions on the opening of a new current account. These rules are applicable to estate projects, capital market transactions, White Label ATM Operators and their agents for sourcing of currency, among others. As per the new rules, the projects as mentioned earlier would not require to maintain 70 per cent of advance payments collected from the homebuyers which are mandated under Section 4 (2) l (D) of the Real Estate (Regulation and Development) Act, 2016 for opening a current account. RBI said, "On a review, it has been decided to permit banks to open specific accounts which are stipulated under various statutes and instructions of other regulators/regulatory departments, without any restrictions placed in terms of the above-mentioned circular dated August 6, 2020".

✅Which type of Current Account is right for me?

Basic Current Accounts are transaction accounts with high minimum balance account requirements and zero interest rates. However, banks now offer a variety of Current Accounts designed to meet different customer requirements like an overdraft facility, low or nil minimum balance account, higher transactional capabilities and a relationship manager. You will need to compare the Current Account features of different banks to select the best bank for Current Account.

✅How to open a Current Account online?

To open a Current Account online, you can visit the website of the bank that you want to open an account with. Redirect yourself to its Current Account page and find the “apply now” option.

✅How can I switch my Current Account?

No, there is no process to automatically switch your Current Account to another bank. Once you have decided to open your Current Account with a different bank you must notify your current bank, following which the bank will initiate the process of closing your Current Account. In the meanwhile, your new bank will get in touch with you and initiate the process of opening a new Current Account.

✅What is overdraft?

An overdraft is a loan facility under which a credit limit is granted on your Current Account and you are allowed to withdraw money within the credit limit to meet your working capital requirements. This credit limit is pre-determined and you will need to pay interest on the overdrawn amount for the corresponding period.

✅What are the different types of Current Accounts?

Depending on your needs, a Current Account can be Standard, Premium, Packaged, Foreign Currency or Single Column Cash Book.

✅How long does a cheque take to clear?

A cheque takes 3 business days to clear, including the day of deposit. However, nowadays customers use NEFT and RTGS facilities to ensure a real time or same day processing of payments and receipts.