Introduction
Every business, regardless of size, must manage finances carefully, monitoring expenses to avoid cash flow issues. A current account is essential for business stability. Regularly reviewing account statements helps track transactions, handle unpaid invoices, and streamline financial management. Explore the best current account options and learn how to open current account online or offline for more insights.
What is a Current Account?
Before opening a current account, understanding the current account meaning is crucial. Current accounts serve as a financial tool for businesses, facilitating day-to-day transactions. These accounts are commonly employed by business proprietors and corporations for financial management.
With digitalization of finance has rendered the opening of a current account simpler. Businesses can open current accounts online from their own premises. Current Accounts offer a range of tailored features such as integrated vendor payments, payroll services, corporate credit cards, and more—all within a single account.
Benefits & Features of Current Account
The features and benefits of current accounts are:
- Funds in current accounts do not earn interest.
- Funds are readily available to the account holder whenever in need.
- The number of withdrawals and deposits allowed in a current account varies based on its account variant type.
- There are no limitations on the number of cheques issued by businesses or the number of transfers conducted via Internet banking in current accounts.
- Current accounts offer anytime withdrawal flexibility to address business cash needs.
- Deposits of cash or cheques at different bank branches are allowed, enhancing convenience for collecting payments from small customers.
- Obtaining an overdraft against a current account is a straightforward process, aiding in meeting business working capital requirements.
- Customised current account variants are available based on the type of entity/business/account holder, like special accounts for trusts, societies, associations, clubs, etc., with benefits such as free monthly cash deposits.
- Current account holders receive a monthly allotment of cheques at no extra cost, unlike savings accounts, where annual charges apply for new chequebooks.
- Phone and SMS banking provide transaction and balance updates without the need to visit a bank branch.
- Current accounts facilitate efficient financial management for businesses.
Best Current Account Options Available in 2023
The best current account options available are given below:
Name of the Bank | Current Account Options Available |
Axis Bank | Liberty Digital Current Account for Proprietorship Firms Current Account Normal Current Account Advantage Current Account Select Current Account Global Economy Business Current Account Classic Current Account New Economy Group Current Account Trusts Current Account Privilege Current Account EEFC Current Account Large Corporates Current Account Government Organisation Current Account Club 50 Current Account Channel One |
IndusInd Bank | Indus Freedom Current Account Indus Tarakki Current Account Indus Max Account Indus Select Current Account Indus Select Plus Current Account Indus Grande Business Account Indus Dollar One Trade Current Account |
ICICI Bank | Smart Business Account 2.0 Ivy Super Merchant Current Account Trade Basic Account Small Business Account 2.0 Gold Trade Gold E-mandi Account IStart up 2.0 Trade Platinum Account Escrow Account |
Kotak Mahindra Bank | Neo Current Account PRO Current Account Startup Regular Current Account Online Current Account Startup Premium Current Account Merchant One Current Account Activ Money Current Account Astra 15 Current Account Ace Current Account Elite Current Account Global Trade Current Account Merchant One Premium Current Account Astra 05 Current Account NRE Current Account NRO Current Account |
HDFC Bank | Advantage Current Account Active Current Account Ascent Current Account Premium Current Account Regular Current Account Plus Current Account Vyapar Current Account Smart Ups for Startups Saksham Current Account |
SBI | Startup Current Account Regular Current Account Silver Current Account Gold Current Account Diamond Current Account Platinum Current Account Rhodium Current Account Surbhi Current Account Master Current Account Smart Current Account Power Jyoti Power Jyoti PUL Current Account RERA Current Account |
Monthly Average Balance (MAB) Requirement on Basic Current Account of Different Banks
The current account minimum balance requirements vary from bank to bank. The minimum balance requirement for basic current account of top banks is given below
Name of the Bank | Minimum Balance |
SBI-Regular Current Account | Rs. 10000 |
Punjab National Bank (PNB Silver Current Account) | Rs. 5000 |
Axis Bank-Normal Current Account | Rs. 10000 |
ICICI Bank-New Startup Account | Zero balance |
Canara Bank Privilege Current Account | Zero balance |
HDFC Bank-Regular Current Account | Rs. 10000 |
Yes Bank-Business Value Current Account | Rs. 10000 |
Types of Current Accounts Available in 2023
Banks provide various current account options to match customers’ transaction needs, but it is essential to consider these options vary among banks. The different types of accounts available are:
Standard Current Accounts
This account mandates a minimum average monthly balance and provides services like cheque books, debit cards, and overdrafts.
Basic Current Accounts
Designed for low-income individuals like pensioners and young people, this product streamlines financial management, though daily cash withdrawal limits apply.
Premium Current Accounts
Opening this account type unlocks exclusive offers and benefits, making it the ideal choice for large transactions.
Packaged Current Accounts
A current account of this type provides numerous advantages, including travel insurance and medical assistance.
Foreign Currency Current Accounts
Foreign currency accounts are available to NRIs and individuals who conduct frequent transactions in foreign currencies.
How to Open a Current Account Online in India?
You can easily open current account online by following the instructions given below:
- Go to the official website of the preferred bank
- Choose the type of current account from the ‘products’ option on the dashboard
- Click on the ‘Apply Online’ option
- Fill in the online application form
- Upload the required documents and submit the application after reviewing the terms and conditions
- After the verification process, a representative of the bank will call you if additional information is required.
- Once your application is approved you will receive a confirmation along with account details. The details will include the account number and net banking login credentials.
How to Open a Current Account Offline in India?
To open a current account offline
- Visit the nearest branch of the preferred bank.
- Procure the current account application form.
- Complete the application form and submit it along with copies of the documents required at the designated counter.
- The bank’s official will verify the application and the documents.
- An initial deposit depending on the type of account will have to be remitted.
- The account will be opened thereafter.
Documents Required to Open Current Account in India
The documents to be provided for opening a current account are given below:
- A PAN Card of the business entity is mandatory for current account opening. In the case of a Sole Proprietorship Firm, the PAN Card of the Proprietor will suffice.
- Depending on your entity type, provide documents like a Certificate of Incorporation, Memorandum and Articles of Association, Partnership Deed, Certificate of Registration under the Shop Act, GST Certificate etc.
- Address proof of the entity like utility bills, business proofs with the registered address, and similar documents.
- Identity proof of the proprietor, and all partners/directors should be submitted. Submit identity proofs like Aadhaar Card, Voter ID, Passport, or other government-issued IDs.
- KYC documents are essential for verifying the identity and address of the proprietor/partners/directors
- Depending on your business, you may need documents like a GST registration certificate, tax registration papers, and more.
- A declaration Informing the bank about any existing credit exposure with the banking system.
- Provide information about the beneficial ownership of the entity.
Difference Between Current Account & Savings Account
The difference between Current Account and Savings Account is given below:
Savings Account | Current Account |
Mainly meant for personal savings and earning interest on deposits. | Tailored for business transactions and not for interest-earning |
Funds in savings accounts earn interest between 3% to 7% | No interest is paid on funds in the current account |
Low minimum balance requirement | Higher minimum balance stipulation |
Limited monthly withdrawals are allowed with a fee for exceeding the limit | Unlimited withdrawals are allowed |
No overdraft facility | An overdraft facility will be provided |
Tips To Keep In Mind When Opening Your Current Account
Before you open a current account you should be mindful of certain aspects to get the best out of the various options available.
Minimum Balance Requirement
Current Accounts minimum balance requirements are stipulated but no interest is provided on the minimum balance. The Average Quarterly Balance (AQB) varies based on account type and features, affecting working capital utilisation. Be cautious to avoid excessive idle funds in the current account by way of AQB.
Evaluate Your Needs
Assess your needs and benefits. Current Accounts offer advantages like free check payments, higher limits, and home banking for businesses. Consider AQB requirements vis-a-vis the benefits to align with your business requirements.
Availability of Overdraft Facility
A key Current Account benefit is immediate access to an overdraft facility, providing quick, unsecured loans for short-term business needs, enhancing flexibility in seizing opportunities and addressing operational challenges.
Sweep-in Sweep-out Facility
Though Current Accounts do not yield interest on AQB, some provide sweep-in/out features. Idle funds over a set limit are transformed into Term Deposits, earning returns. Ensure your bank offers this to optimise idle funds.
Current Account FAQ’s:-
No. GST registration is not mandatory to open a current account
Individuals, Proprietorship and Partnership Firms, Public and Private Limited Companies, HUF, Trust, Clubs, and Societies can open a current account.
The Average Monthly or Quarterly balance requirements differ from bank to bank.
Yes. A sweep-in/out facility wherein funds above a threshold limit are converted to fixed deposits will enable earning interest on funds in the current account.
Yes. Some banks provide the option to open a zero-balance current account.