Current Account : Meaning , Feature and Types

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Fincrif India

Oct 17

05:44 AM

Current accounts make running a business easier, especially for new businesses, as they assist the owner in creating a stable stream of revenue. You can benefit from much more than just financial deposits and withdrawals by having a current account in your own name. Additional benefits will also be provided to you in the shape of checks, DDs, net banking, etc.

An account that allows for immediate deposits and withdrawals is known as a current account. You can choose the current account that is best for you from the variety that most banks offer, each with a particular set of characteristics.

What is a Current Account ? 

A current account is a type of bank account that is mostly used by organisations or people who trade with banks often on a daily basis. In comparison to those who have savings accounts, those who have current accounts can take advantage of a variety of services. In most banks, the owner of a current account can still simply access the overdraft facility even if they don't receive any interest. Only for the purpose of operating a business can this sort of account be utilised; it cannot be used for savings or investments.

Feature of Current Account

A current account has the feature listed below:


  • The transaction limit is more than the savings account.

  • The majority of the time, a current account is interest-free (however certain banks do give interest rates on deposits made into current accounts).

  • In order to open the account, a larger minimum balance is needed.

  • One can use current accounts for businesses, firms, people, business owners, etc. But a company is not permitted to have more than one current account.

  • In the home branch, there is no cap on cash deposits for current accounts.

  • Making business transactions go as smoothly as possible is the current account's main goal.

  • If the required minimum balance isn't kept, penalties could be assessed.

Types of Current Account 

Most current accounts fall into one of five categories. Following is a list of them:

Standard Current Account

A standard current account is a bank's most basic current account service. A limitless number of daily transactions are permitted on this interest-free account. Demand draughts, cheque books, and other items are all offered without charge.

Premium Current Account 

A premium current account holder benefits from a plethora of tailored features provided by the bank. These are given to make it easier for the customer to conduct commercial operations in accordance with their demands and specifications. 

Packaged Current Account 

This sort of current account falls halfway in the middle. A bundled current account comes with extra benefits provided by the bank to the account customer. These can include accident and travel insurance.

Foreign Currency Account 

A foreign currency account is perfect for customers who regularly do overseas transactions. Customers that have foreign currency inflows and outflows into their accounts might use this option to a current account.

Single column cash book

It is a technique to keep track of your finances without keeping a bank account. You can choose this form of credit monitoring with the aid of two distinct columns of debit and credit finances if you don't want the further features of a current account.

Advantages of Current Account 

Numerous advantages exist for creating a current account in India as opposed to a savings account. There are a few benefits to creating a current account that are listed below.


  • An individual conducting business may make an unlimited number of withdrawals from a current account.

  • Deposits put into current accounts that were opened at the bank's main branch were not subject to any restrictions.

  • Demand draughts, pay orders, and checks can all be issued by the current account for direct payments.

  • The ability to use overdraft facilities is one of the current account holder's most significant advantages.

  • Once the current account is setup, businesses are given access to a number of additional perks, including:

  • You can deposit and withdraw money from any location.

  • There are no fees for inward transfers.

  • Transfer to multiple locations.

  • The owner of a current account has unlimited withdrawal options.

  • Holders of current accounts offer internet and mobile banking to make it simple to do business.


How To Open Current Account 

If you're unsure of how to do so, simply follow the instructions below:


  • Your eligibility must be confirmed before you may start a current account. The list of requirements for becoming a current account holder can be found on the website of the relevant bank.

  • Download the application form on the bank's website by going there now. The same service is also physically available at the bank's closest branch.

  • Your bank statements, personal information, and business information should all be filled out accurately.

  • To be provided with the application form is a list of papers that will be made available online on the bank's webpage. In order to ensure a smooth account opening, obtain the list of required papers.

  • submit the online application form and any supporting documentation. This can be done in person at the nearby branch of the relevant bank.

  • The bank will confirm all of the information before opening the current account in your name.

Conclusion 

Current accounts make running a business easier, especially for new businesses, as they assist the owner in creating a stable stream of revenue. You can benefit from much more than just financial deposits and withdrawals by having a current account in your own name. Additional benefits will also be provided to you in the shape of checks, DDs, net banking, etc.



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