Bank Current Account

Bank Current Account

A current account is an account in which there is no limit on the number of actions or transactions that can be made in a day. Further, they are also referred to as Transactional Accounts. These types of accounts are supported neither for investment nor for profits or savings, but only for the benefit of the company as these accounts are the common liquid type of accounts.

Banks don’t spend any credit on the value lying in these accounts and in some instances also it charges a small price for the assistance they give. These types of bank accounts are normally presented by businesses as their number of transactions is on the greater side.

Benefits of having a current account

• Current accounts provide handling of high volumes of vouchers and payments regularly.
• Under these statements, unlimited withdrawals are provided in line with the levied payment transaction fees.
• There are no limitations applied to the deposits built into the current accounts opened at the bank’s home division. Additionally, account holders can also save cash at other departments upon handling small fees as suitable.
• Cheques, demand drafts, or pay orders can be assigned through a current account for obtaining direct payments to bankers.
• Overdraft facilities are also feasible for current account owners.
• The ability of small interest profits on account balance reaches a current account with more attractiveness for its users.
• Businesses are moreover benefited with many other advantages in the form of free internal payments, security or deposits and withdrawals at any place, multi-location transfers, etc.
• Businesspersons can switch from their current accounts without any purpose, subject to business security transaction tax, if any, taxed by the government.
• Assists bankers of the account holder who can hold access to data on the account holder’s credit-worthiness within the interbank connection.
• It promotes the technical and industrial progress of the country. Without its guidance, businessmen would face challenges in managing their businesses.
• It further provides with Internet-banking and mobile-banking to allow businesspersons to carry out the essential business transactions immediately and with comfort.
• It also implements various other benefits such as:
  • Withdrawal and deposit of cash at any location.
  • Multi-location funds transfer.

Checklist Requirements to maintain a current account in Bank

• A current account holder must have a monthly average balance (MAB) as low as Rs 10,000
• Account maintenance cost
• Limitless number of cash and deposits
• Cash withdrawal conveniences
• Multi-City cheque facility

What are the features of a current account?

To be specific, below are some of the features of a current account which distinguishes it from a savings account or any other bank account.

• More free transactions allowed
• Interest-free account
• Overdraft facility
• Provides direct payments accepting DD, cheques, and pay orders.
• Minimum account balance (MAB) begins from ₹10,000/- in general
• Limitless withdrawal and the deposit facility

What are the different types of current accounts?

Banks provide different sorts of current accounts holding in attention the different banking needs of their clients or customers. One should determine the type of account that suits the nature of transactions one needs to conduct. Specified below are the various types of current accounts given by the majority of the banks. However, it is to be remarked that the type of current account may differ from one bank to another.

• Standard Current Accounts - This type of account needs the customer to have a minimum monthly average balance. Further, the account does not give any credit on the deposited cash. But, it gives debit cards, chequebook facility, overdraft facility etc. to its clients and customers.
• Basic Current Accounts - It is perfect for customers with moderate wage earnings like young people, pensioners, etc. It encourages customers to control their investments rather easily. However, there are some limitations to the daily cash withdrawal limit.
• Premium Current Accounts - This is a kind of account that arises with particular benefits and offers to the customers. This account is completely suited for taking out large value transactions.
• Packaged Current Accounts - This current account type gives the account holders with loads of benefits and perks. It begins with exclusive features like travel insurance, medical support, and more.
• Foreign Currency Accounts - Foreign currency accounts are allowed to NRIs or people who want to bring out regular transactions in foreign currencies.

Comparison of minimum balance requirement for current accounts in India

Current account minimum balance conditions and conditions regarding the maintenance of monthly average balance (MAB) differs from bank to bank. Given below is the ratio of monthly average balance requirement on some of the regular current account variants offered by different banks.

Documents required for opening a current account:

Here are the documents needed for starting a current account:

• Proof of identity of the trader or proprietor or professional or association or institution or, etc. such as the PAN card. Additional documents for people include passport, voter ID, driving license.
• Proof of address for a person: electric bill, telephone bill.
• Proof of the existence of the company or business.

Any of these documents will be sufficient to secure proof of the existence of the company:

• Certification and licenses published by the municipal authorities.
• GST registration certificate with the GSTIN number.
• A registration document issued by professional tax experts.
• A company registration document published by the particular state government.
• RBI (Reserve Bank of India) /SEBI (Securities and Exchange Board of India) enrollment certificate.
• An import-export license announced by the Director-General of Foreign Trade.
• Permits by FSSAI (Food Safety and Standards Authority of India).

Proof of address for business:

• TAN (Tax Deduction and Collection Account) allocation report by the Income Tax
• Property certification reports
• Property Tax or water tax bills
• Title documents or deeds to the property or rental certification documents.
• Existing bank account reports.

If the person opening the bank account is an NRI, the following additional documents will be required:

• The firm is not involved in any agricultural projects, print media, real-estate firms, or businesses.

If the entity initiating a current account is a limited liability partnership, the following is required:

• Certificate of business for Limited Liability Partnership
• The Limited Liability Partnership agreement
• KYC (Know Your Customer) of Designated Partners
• List of selected associates and their Designated Partner ID (DPID) published by the Ministry of Corporate Affairs
• A resolution confirming that the Designated Partner is allowed to be a signatory.

If the entity presenting a current account is a business or company, the following additional documents are required:

• Articles of Association
• Memorandum of Association
• Certificate of Commencement of Business for a Public Limited Company
• Certificate of Incorporation
• List of directors of the company
• Board resolution electing signatories.

FAQs on Bank Current Account

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