A current account is a type of bank account that is primarily used for business purposes. It allows the account holder to carry out transactions such as deposits, withdrawals, and payments on a regular basis. If you are planning to open a current account, there are a few things that you need to keep in mind.
Procedure for opening a current account
The steps for opening a current account are relatively simple. First, you need to identify a bank that offers current accounts. Since most banks offer different types of current accounts, it’s important to compare current accounts and choose one that suits your business needs. Once you have identified a bank, you need to submit the following documents:
Identity proof: You must submit documents such as a PAN card, Aadhaar card, passport, or voter ID card.
Address proof: You also need to provide address proof documents such as a utility bill, rent agreement, or property papers.
Business proof: You need to provide proof of your business, such as a business registration or GST certificate.
Passport size photographs: You must submit passport size photographs of all authorized signatories.
Once you have submitted these documents, the bank will verify them, and if everything is in order, they will open a current account for you. The account will be activated and you will receive a cheque book, debit card, and internet banking details.
Minimum balance requirements
The minimum balance requirement varies from bank to bank and also depends on your current account type. Most banks require a minimum balance to be maintained in the current account. Some banks may require a higher minimum balance if you opt for additional services such as a higher number of free transactions or a higher credit limit.
Overdraft facilities can be a useful feature, especially for businesses that experience occasional cash flow problems. However, overdrafts can also be expensive, so it’s important to compare the overdraft fees and interest rates before choosing an account with this facility.
Fees and charges
Different banks have different fees and charges, so it’s important to compare the costs before opening an account. Look for an account with low monthly fees and transaction charges. Some banks may also require a minimum balance to be maintained in the account to avoid additional charges.
Unlike savings accounts, current accounts usually do not earn any interest.
Services and benefits
Finally, customer service is an important consideration when choosing a bank for your current account. Make sure the bank provides good customer service, with a dedicated customer support team that is available to help you with any queries or issues.
To wrap up
Opening a current account is a relatively simple process, but there are a few things that you need to keep in mind. Choosing a bank that offers the services and benefits relevant to your business needs is essential. Maintaining the minimum balance requirements is crucial to avoid penalty charges.