A current account, which is also famously known as a financial account, assists businesses in carrying a considerably higher amount of banking transactions compared to a savings account.
As savings accounts are more aligned for individuals who want to save, deposit, and use funds for personal expenditures, they come with limitations on the number of transactions per day or charge more for crossing the transaction limits. To manage the natural flow of business, the banks offer current accounts.
To overcome the problems associated with savings accounts, current accounts are mandatory for businesses. Current accounts enable businessmen to transact frequently and a large number of times every single day.
Moreover, current accounts offer benefits like overdrafts, loans, FOREX, and international payments, to name a few. The best part about current accounts is that you no longer must visit banks to open your account, you can open a current account online with ease!
Why should businesses choose a Current Account?
– No limitations on the number of transactions
– No limitation on the number of deposits & withdrawals made at the bank’s home branch
– Plenty of facilities are available like cheques, demand drafts (DDs), Internet banking & mobile banking
– Provision of overdraft facility (OD), which enables account holders to make payments surpassing the balance by taking a loan from the bank
What things should you know before opening a current account?
In India, a current account can be opened by an individual or proprietor, a company, trust, or association. However, you must always make sure to follow the KYC rules.
The main objective of opening a current account is to get rid of limitations on the number of daily transactions and, in a way, grow the smooth operability and sustainability of your business. Having said that, these are the few important things you must always remember as a current account holder:
- a) Always maintain a minimum balance
Unfortunately, the minimum balance required to maintain a current account is much higher than a savings account, and a hefty fine will be charged upon failing to do so.
- b) As the current account offers high liquidity, you get no interest on the money deposited. However, few banks do provide interest.
- c) Your bank can apply interest on the funds that you borrow.
- d) Some addon services can be useful but really expensive.
How to Open a Current Account with a business name?
Any individual who owns a business or is a partner associated with the business is qualified to open a current account in India. Current accounts are available at all the commercial banks.
If you are interested in opening a current account, then you can do so at a place that’s most suitable for your needs. You can open a current account by going to the bank physically, or with the advancement in technology, you can open your bank account online by visiting your preferred bank’s website. You can also initiate the process of opening a current bank account by calling your bank or through an SMS.
You will have to fill out the general application form. This form has all the details and information required by your bank. This is done to gain a better understanding of your stability, your business, and your needs and requirements to assist you better.
Here are some of the most general fields that you must fill out in the form-
Name and address
Details of nominee
Details of owner
Associates (if you have any)
Details regarding identity proof
Required business services
Addons (if you want any)