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What Is A Current Account? How To Open A Current Account?

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By Author: Neha Sharma
Total Articles: 241
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A current account is a popular choice for businesses that have a high number of transactions. A current account is a type of account in which there are no restrictions on the transactions. This makes it an asset for businesses which have multiple transactions throughout the month.

Features of current account:

1. No restrictions on transactions:
A business has several different transactions that it has to make over a period of time. These include transactions like cash deposits, payments to vendors and payroll operations. A current account allows unrestricted cash deposits and withdrawals which greatly facilitate liquidity for the business. In exchange for that liquidity, no interest is paid on a current account balance.

2. Cash management:
One of the biggest features of a current account is cash management. Banks extend special facilities to current bank account holders such as :

• Free cash deposits up to a particular limit
• Free cash withdrawals up to a particular monthly limit
• Free local and intercity cheque collections
• Free RTGS and NEFT transactions
• Free Demand Drafts (DD) and Pay Orders (PO)
• A certain specified number of free cheques per month
• Free monthly account statements
• SMS notifications

Depending on the type of current account opened with the bank, some of these facilities will change. However, opting for a current account gives greater flexibility to a business in terms of managing its transactions as compared to a savings account.

3. Minimum Balance:
In exchange for the facilities provided by the bank to current account holders, the banks require a certain minimum account balance. These minimum account balance requirements change from bank to bank and differ for the different types of current accounts.

4. Other services:
Current account holders can get other facilities from the bank at a discount. Opting for an overdraft is very easy for current account holders. Banks may extend other discounts for their other offerings.

How to open a current account?

Current account opening can be done both online and offline.

Offline current account opening:

A current account can be opened offline by visiting the branch of the bank in which the account has to be opened. An application form will have to be filled up and submitted to the bank along with the required documents for the bank to process the application. Once the application is processed, the account will be opened in the name of the business. Before filling up the application form, be sure to check the different facilities that the bank offers to its current account holders.

Online current account opening:

With advancements in digital banking, it is extremely simple and convenient to open a current account online. To open this account online, you need to visit the bank’s website and fill up an online application form. Once you fill up the form, a bank’s representative will get in touch with you for submission of documents and other procedures to open your account. However, before filling up the form, it is essential to do adequate research on the different types of accounts available with the bank. This will ensure you pick the right account for your organization’s needs.

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