A current bank account is essential for business owners and entities to manage their daily financial transactions. Here, we explore who needs a current account, its benefits, the eligibility criteria, and the documents required to open one.
Who Needs a Current Account?
Current accounts are designed for businesses, NGOs, private companies, and individuals for business purposes. These accounts help manage daily financial activities efficiently. You might need a current account if you are one of the following:
- Non-government organisations or charitable trusts
- Public sector undertakings
- Religious organisations/government bodies/educational institutes
- Private limited companies
- Partnership/limited liability partnerships
- Sole proprietorships
- Co-operative societies/societies/trusts
- Individuals (for business purposes)
- Freelancers
Benefits of Applying for a Current Account
- Higher Transaction Limits
Current accounts offer higher financial transaction limits, ideal for businesses making regular transactions. This ensures smooth operations by enabling continuous fund flow, which helps maintain liquidity and manage day-to-day business expenses efficiently.
- Cash Withdrawal Flexibility
Current account holders can enjoy free cash withdrawals at the home branch and up to a specific limit at non-home branches. This flexibility helps businesses access their funds conveniently and manage cash flow effectively.
- Complimentary Demand Drafts
Current accounts offer complimentary demand drafts, allowing businesses to make secure and cost-effective payments to suppliers and vendors, ensuring transactions are completed without additional costs.
- Convenient Banking
Designed for high transactional convenience, current accounts facilitate the seamless movement of large sums of money. This is essential for managing operational expenses, paying suppliers, and handling other financial obligations without delays.
- Overdraft Facility
Current accounts provide an overdraft facility, allowing you to withdraw funds over your account balance. The interest is charged only on the amount utilized, making it a cost-effective solution for accessing additional liquidity as needed.
Eligibility Criteria for Current Account
To open a current account, you must fall into one of the following categories:
- Resident Individual
- Hindu Undivided Family (HUF)
- Sole Proprietorship Firms
- Partnership Firms
- Limited Liability Partnership Firms
- Private and Public Limited Companies
Documents Required for a Current Account
The documents required to open a current account vary based on the customer type:
Individual
- PAN
- Aadhaar
- Business Proof
- Account opening cheque
Proprietorship
- Proprietor PAN
- KYC of Proprietor
- Government-issued Registration certificate of the firm
- FATCA
- Account opening cheque
Company and LLP
- Entity PAN
- Constitution documents of the Firm
- KYC of Authorised Signatories and Beneficial Owners (PAN, Identity, and Address Proof)
- Board Resolution/LLP Letter & other required documents
- FATCA
- Account opening cheque
Partnership
- Entity PAN
- Constitution documents of the Firm
- KYC documents of Partners/Beneficial Owners (PAN, Identity, and Address Proof)
- Partnership letter
- FATCA
- Account opening cheque
Note: Original verification and other guidelines apply as per the current process.
How to Open a Current Account Online?
Follow these steps to open a current account online:
- Choose a leading bank of your choice.
- Visit their website and go to the Current Account section.
- Click on “Apply Now”.
- Enter all the needed details such as name, address, KYC details, etc.
- Click on “Submit”.
- Wait for the bank’s process and approval.
- Alternatively, visit the branch for an offline procedure.
Current accounts are beneficial for various entities, offering higher transaction limits, overdraft facilities, and additional perks like free demand drafts. While they require a higher minimum balance and don’t accrue interest, their practical benefits in managing day-to-day finances make them indispensable for businesses. Understanding the eligibility criteria and available features is crucial for choosing the current account that best suits your business needs.
