What Is A Current Account And How To Apply For It

By Author: John Judge
Total Articles: 5
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Most business owners, companies, traders, and enterprises prefer a current account because it gives them the freedom to carry out frequent transactions.

The banks do not levy a transaction limit on current account funds, which makes deposits and payments more convenient. Another crucial advantage that a current account offers is the overdraft facility. By utilising this benefit, an individual can withdraw or use more money than he/she has in the account.

While a current account's features are distinct, many confuse it with a savings account. Here are some factors that separate it from each other -
• Interest
Most banks offer an interest rate between 3-7% on a savings account. However, current account holders aren’t eligible for this benefit.
• Transactions
Almost every bank has a limit on monthly transactions for savings account. But banks don’t levy such a restriction on current account.
• Balance Requirement
The minimum balance needed for a savings account is lower compared to a current account.

Features of a Current Account
• Current accounts facilitate ...
... companies by allowing them to avail frequent transactions to support their business.
• Multiple current accounts for one business is not allowed.
• The minimum balance required is generally on the higher end.
• There is no limit on withdrawals and deposits.

Advantages of Opening a Current Account
• An individual can conduct financial transactions more frequently.
• These accounts provide the benefit of limitless deposits and withdrawals.
• A current account holder is eligible for overdraft facilities.
• Companies can take benefit from services such as multi-location transfer, free inward remittances, etc.
• Banks provide passbook, account statement, and sweep-in facility to the current account holders.
• Internet and mobile banking facilities are also provided to a current account holder.
• A current account enables the holder to carry out direct payments using demand drafts, cheques, etc.

Now that you have an idea about a current account, read on to find out how to open one.

How to Open a Current Account

The first step to opening a current account is to meet the bank’s eligibility requirements. The prerequisites differ from one bank to another.
Post that, you need to download and fill the account opening form. This form will be available on a bank’s website and or at the branches.
Along with this form, you need to submit necessary documents such as-
• Address proof
• Proof of the company’s existence
• PAN Card
• KYC documents
• Agreement of partnership (only for joint businesses)
• Tax Registration documents
• Licenses
The aforementioned documents are generally required by every bank. However, the documentation process is based on the business purpose, and it may vary from bank to bank.