Introduction to Current Account
A financial account or a current account is maintained by the individuals at the financial institutions as a deposit account but to carry out extensively high net-worth transactions on a timely basis. On request of the applicant, a current account is created by the financial institution which can be accessed immediately and frequently. Moreover, current accounts to aid financial dealings offer a wide range of customized options and are generally related to the liquid deposits. On the other hand, the current account holders can easily make payments via cheque facility to the creditors provided by the financial institution. Additionally, when compared with a savings account, the current account holders are required to maintain a higher minimum balance and also, interest rates cannot be availed on these types of accounts. The reason why individuals prefer current accounts is that up to an agreed limit, he/she can avail the benefits of overdraft facility with ease.
Why Current Account?
The current accounts can be only availed by the individuals with a business background as in business, significantly higher numbers of transactions are performed on a regular basis. Here are some of the benefits of current account;
- The current accounts provided by the financial institutions come with mobile banking and internet banking facilities.
- An Overdraft facility can be easily availed.
- With the likes of demand drafts, cheques, and other payments options, it allows flexible payment options to the businessmen.
- For home branches, there is no limit set on deposits.
- Moreover, withdrawal limit is also not set.
- The business transactions can be made without any delay.
Current Account Features
Whenever you start a new business, you are required to have a current bank account to make the transactions easy and hassle-free. Nowadays, to cater different business needs, the financial institutions are providing the individuals with a broad range of lucrative offers and benefits on their current bank accounts. Herein are some of the primary features of Current Accounts which make it different from other bank accounts.
- Unlike a savings account, a current account allows the individual to make transactions beyond the limit.
- However, if you want to avail the benefits of the current account, you are required to maintain a higher minimum balance.
- You can easily make frequent transactions including cash, cheques, fund transfer and more.
- Trusts, organizations, propriety concerns, private and public institutions, individuals, etc. can operate the current bank account.
- Unlimited transactions can be made in a single day as there is no limit set.
- The penalty will be charged for not fulfilling the minimum balance criteria.
- KYC guidelines are needed to be followed to open a current bank account, similar to a savings account.
- A single business can only possess a single current account; multiple accounts are not permitted by the financial institutions.
- The current accounts are designed keeping in mind the daily business goals of the organization or the individual.
- In the recent times, some of the financial institutions are offering the individuals and business organizations with interest rates on their current accounts.
- However, the rate of interest is charged on the short-term funds the organization or individual borrowed from the financial institution.
Accessing the Current Account
When you are engaged in business related operations, you will be required to make daily cash transactions in one or another way. Thus, current accounts provided by the financial institutions offer different ways for accessing the current account.
- Home Branch:
The easiest and best way to access your current account is by visiting the parent branch of your current account. Visiting the branch will simplify all your questions and banking requirements like financial assistance, cash deposits, cash withdrawal and more. However, depending on the bank, after a certain limit, assured charges may be applicable for cash deposits and withdrawal.
- Cheque Facility:
Withdrawing cash from the account using the cheque facility is one of the traditions that we follow till date. It is one of those physical transaction methods preferred by the customers for accessing their current account.
Every financial institution whether it is small or big is installing ATMs all across the cities to ease down the struggle of getting to the bank branch for cash withdrawal. The ATMs can be used by the customers for withdrawing cash even after banks are closed although, the withdrawal limits are low.
- Internet Banking:
The internet facility has been used by most of the individuals on a daily basis, and this is the reason why financial institutions and banks avail the facility of internet banking for accessing their accounts. With online banking, you can perform numerous banking activities like viewing balances and account statements, transferring cash, paying utility bills and more. You can access your current account associated with the bank even after the banking hours are closed. You are just one click away from accessing it.
- Mobile Banking:
With the number of smartphone users increasing day by day, it has provided an opportunity for the financial institutions to offer the customers with something that will make it easier for them while performing banking activities. Every bank and financial institution have come up with their very own mobile application which allows the customers to perform the required banking operations hassle-free such as balance check, fund transfer, online payment and more.
Different methods for cash depositing in Current Account
Cash depositing is current accounts is a hassle-free procedure, and you can follow the below-given methods for depositing cash in your current account.
- Wire transfer from foreign institutions
- Electronic transfers
- Cheque deposits
- Depositing cash at any of your bank branches
Current Account Types
According to the basic needs of the customer, the financial institutions provide with different types of current account. However, the individual must possess a clear understanding of what type of transactions he/she is going to make after opening the account. Herein are some of the common current account types offered by the financial institutions.
- Foreign Currency Accounts:
Those individuals whose business constantly deals with transactions made out in foreign currencies can avail for foreign currency accounts. This type of current account provides with easy liquidity and cash flow.
- Premium Current Accounts:
Those individuals whose business constantly deals with high financial transactions can opt for Premium current accounts. This type of current account provides with a wide range of customized features and benefits.
- Single Column Cash Book Accounts:
It is one of those current accounts which are used by the individuals who do not maintain any kind of bank accounts. The individuals with Single column cash book accounts are eligible for making daily transactions but cannot avail the facility of overdraft.
- Packaged Current Accounts:
The individuals having packaged current accounts are availed with the benefit of roadside assistance, medical support, travel insurance and more.
- Standard Current Accounts:
This type of current account comes with minimum balance criteria and is generally a non-interest bearing account. The account holders are benefitted with a vast number of privileges such as overdraft facility, cheque books, debit cards and more. Moreover, the additional features include free NEFT and RTGS transactions, the internet and SMS banking and more.
Eligibility Criteria for Current Account
Every financial institution in India is allowed to open current accounts although; it is only created by the financial institution on the request of the applicant. There are minimum criteria that must be achieved in order to open a current account. Herein are the eligibility criteria that must be followed to open a current account with the bank.
- Current accounts can be opened by the individuals also but only for business purpose.
- Hindu Undivided Families (HUFs) and Sole Proprietorship Firms are also eligible for opening a current account. However, they will be required to provide self-attested documents to the financial institution.
- Partnership Firms can apply for opening a current account.
- Public and Private Limited Companies are eligible for opening a current account.
- Trusts, Society, Association, and Clubs (TASC) are also allowed.
- Limited Liability Partnership (LLP) is also eligible but has to be registered under the LLP Act 2008.
- The minimum balance criteria must be fulfilled for availing the current account benefits. The minimum quarterly average balance requirement in most of the financial institutions varies from Rs.5000/- to Rs.10000/-.
The Required Documents for opening a Current Account
In order to open a current account with respective bank, certain documentations are required;
- Address of communication is required to be provided to the bank by the business organizations.
- For opening the current account, the applicant is required to provide an existing savings account cheque to the bank.
- Recent colored photographs of the applicant or business partners.
- Address proof (voter ID, Driver’s license, etc.) and Identity proof (Adhaar Card, etc.) of all the partners of the business organization.
- When talking about partnership firms, the applicants are required to provide partnership agreement to the financial institution.
- A certificate of memorandum and incorporation the company’s association must be submitted to the bank.
- PAN card is necessary.
Kindly Note: All the applicants are required to provide the financial institutions with valid KYC documents in order to carry out the account opening procedure smoothly.
Current account online opening process
The banking sector is offering numerous features to the customers one of which is allowing the customer to open a current account with just a few clicks. Online banking has made the lives of the customers easy and hassle-free. Gone are those days when you waited long enough in a queue to just get an account open. Opening a current account online is a simpler procedure, and you just have to follow the rules and instruction provided by the banking portal.
- The most important thing to do before applying for a current account is to find a suitable financial institution that matches with your specific financial needs. Thus, a thorough background check on the bank before applying for a current account is necessary.
- On the other hand, with internet taking over the world, it is not necessary that every financial institution avails the facility of online account creation. Thus, look for the bank that matches your specific requirements and also avails online account creation facility. When you find it, log on to its portal with a suitable username and password.
- When you open the banking portal, you will see different types of products offered by the bank. But, you only have to select the product that says ‘current account’. When you click on it, the portal will take you to a new tab where a particular form from the bank will arise that you have to fill thoroughly. After filling the form, check it twice or thrice before clicking the ‘submit’ button. Now, you will be asked to provide with a digital copy of all the required documents like your address proof (voter ID, passport, etc.), identity proof (Adhaar card, driving license, etc.), two recent photographs (scanned) and existing savings account cheque. Few more documents will be required on the basis of the type you chose for your current account.
- Now, after the submitting the digital copy of all the documents, the bank-end team of the bank will verify all the documents, and when everything seems legit, they will contact you regarding the success of opening the current account.
Applying for current account Offline (by visiting the bank)
Going to the nearest bank branch and applying for an account opening is the most preferred choice of the customers. This way they feel more secure and are sure about all the undertaking procedures. However, there always comes a time when you cannot avoid a trip to the bank, be it for verification purpose, or something else. Also, some of the financial institutions and banks don’t avail the facility of online account creation. Thus, it is best to visit the nearest bank branch and apply for current account opening.
- The first step is always to get a thorough background check on the financial institution before applying for the current account. Check for the facilities they provide products they offer and the most important, check whether it matches your specific requirement or not.
- The procedure is simple; you just have to fill out the form provided the bank for current account opening. After filling the form, thoroughly check it twice or thrice before submitting it to the clerk. This is necessary because, if any credential you mentioned in the form doesn’t matches with the documents you provide, then your application will be discarded and you have to start again. Now, after filling in the form, you will be asked to provide a copy of your valid documents like your address proof (voter ID, passport, etc.), identity proof (Adhaar card, driving license, etc.), two recent photographs (scanned) and existing savings account cheque. Few more documents as mentioned in the ‘Required Documents’ section will also be required, and that will depend on the category of current account you selected for.
- After providing all the details, submitting the form, everything you provided will be sent for verification. If the back-end team of the financial institution feels like all your credentials are valid, your current account will be opened.
Best Current Accounts offered by Banks in India
Different banks provide with different schemes on current accounts. Deciding over a bank for opening a current account is not that difficult, you just need to check the approachability, security, efficiency and the dedication it shows towards the customer while catering their services.
Everybody’s needs are different, and therefore, it is difficult to tell which bank provides the best products and services.
Herein are some of the best banks that offer flexible current account options to the individuals and business organizations.
HDFC Bank Current Account:
There are numerous current account schemes offered by HDFC Bank to cater the needs of different individuals and business organizations. The current accounts offered by HDFC Bank come with a string of benefits.
- ULTIMA Current Account-
Those involved with distributing manufacturing, multispecialty hospitals and more can avail the benefits of this current account scheme.
- Supreme Current Account-
The large traders and corporate officials can avail the benefits hassle-free transaction procedures with Supreme current account. It is one of the most secure current accounts one can avail and comes with mobile and online banking facilities.
- Apex Current Account-
Those looking for value added services form their financial institutions can opt for this current account scheme. It provides the customer with 10 times the AMB (average monthly balance) as the cash deposit limit.
- EZEE Current Account-
Those who are involved in trading business and have to travel various cities for the trading purpose can avail the benefits of this current account scheme. Facilities like combines cash deposits and other factors like discounts on quarterly average balance make it preferred by most of the traders.
- Agri Current Account-
Those involved in agricultural related business can best use this current account for all their transaction requirements. For the deposits made up to Rs.10 lakhs, no charges are deducted.
ICICI Bank Current Account:
By launching an array of current account products, ICICI Bank I providing the customers with an opportunity to easily and regularly make transactions without any complexities.
- New Start Up Current Account-
For the period of 180 days, the account holder can enjoy the benefits of making cash deposits of up to one year of average monthly balance for free. Along with it, this transaction account offers NEFT and RTGS transaction facility as well.
- Shubhaarambh Current Account-
Those who are new to the business world can avail the benefits of this current account scheme that offers similar facilities like the New Start Up Current Account.
- Smart Business Account-
For availing the benefits of this current account scheme, the account holder is required to maintain Rs.25000/- as the monthly minimum balance. Also, they can be benefitted with making cash deposits of up to one year of average monthly balance for free.
- Roaming Current Account Gold-
Those involved with midsized businesses will be totally benefitted with this type of current account scheme. However, the individual or the organization is required to maintain Rs.1 lakh as the minimum monthly average balance.
- Roaming Current Account Standard-
Those who wish for smooth business transactions can avail for this current account scheme where Rs.10000/- is the minimum monthly balance required.
Axis Bank Current Account:
The Axis Bank Current Account scheme provides the customers with a wide range of benefits and privileges and is specially designed to cater the needs of business class individuals.
- Normal Current Account-
The account holder is benefitted with a free cash deposit facility of Rs.1 lakh for other branches and Rs.2 lakhs for the home branches. Moreover, individuals can avail 25 free transactions every month.
- Local Current Account-
For the local business owners who are looking for some liquidity can avail this current account scheme as this current account option doesn’t come with minimum criteria.
- Business Advantage Account-
The account holder is benefitted with a free cash deposit facility of Rs.1 lakh for other branches and Rs.3 lakhs for the home branches. Moreover, individuals can avail 50 free transactions every month.
- Business Select Account-
With this current account, the account holder can withdraw up to Rs.6 lakhs daily for catering his/her business needs. Moreover, the account holder can avail 100 free transactions every month.
- Sweeps Current Account-
With this current account, the account holder can withdraw up to Rs.1 lakh daily for catering his/her business needs. Also, Rs.1 crore per pool cash deposit can be availed for free.
Punjab National Bank Current Account:
There are two types of current account scheme offered by Punjab National Bank which is designed to cater every need of the account holder.
- PNB Smart Banking Current Account-
For availing the benefits of this current account scheme, the account holder is required to maintain a minimum balance of Rs.10 lakhs. On the other hand, there are numerous variants attached with this type of current account schemes like PNB Platinum, PNB Gold, PNB Diamond and PNB Silver.
- PNB Current Deposit Account-
The Hindu Undivided Families (HUFs), individuals, propriety firms and more are eligible for applying for this type of current account scheme. You can easily avail all the products from any of the PNB branches across the country.
SBI Current Account:
SBI keeping in mind different types of customers have provided with different types of current account schemes.
- Normal Current Account-
Those who are involved in businesses that don’t require huge money transactions can use this current account to fulfill their daily business transaction needs. However, the account holder to avail its benefits have to maintain Rs.10000/- as the minimum monthly balance.
- Unfixed Deposit-
The account holder is required to maintain a total of Rs.15 lakhs as the minimum balance. On the other hand, from one week to less than 365 days, the deposit can be made into this type of current account.
Current Account Monthly Average Balance (MAB) Requirement for Different Banks:
|Bank||Monthly Average Balance||Free Deposit Limits|
|Punjab National Bank||Quarterly Rs.1 lakh||Rs.2 lakhs every day|
|Yes Bank||Quarterly Rs.1 lakh||10 times of average monthly balance|
|Canara Bank||Quarterly Rs.1 lakh||Rs.5 lakhs every day|
|IndusInd Bank||Rs.10000/-||Rs.2 lakhs|
|Axis Bank||Rs.10000/-||Rs.2 lakhs|
|ICICI Bank||Rs.25000/-||12 times the MAB|
|HDFC Bank||Rs.75000/-||10 times the MAB|