A Current Account, also called a financial account, is a type of bank account mainly used by businesses for big transactions. Unlike a Savings Account, it doesn't give you any interest on your money. Business owners, like sole proprietors, partnership firms, trust, association of persons, public and private companies etc. usually open these accounts.
With a Current Account, you can deposit and withdraw money whenever you want, without having to tell the bank beforehand. It's great for paying bills and making big purchases with checks. The whole point of having a Current Account is to help business owners manage their money smoothly.
Current Account minimum balance requirement and maintenance of monthly average balance (MAB) varies from bank to bank.Here's a comparison of the monthly average balance (MAB) requirements for various types of regular current accounts offered by different banks.
| Name of Lender | Monthly Average Balance | Cash Deposit limit |
|---|---|---|
| HDFC Bank (Regular Current Account) | Rs 10,000 | Free up to Rs 2 lakh per month |
| SBI (Regular Current Account) | Rs 10,000 | Free up to Rs 5 lakh per month |
| Kotak Mahindra Bank (Regular Current Account) | Rs 50,000* | Free up to 5 times of MAB (previous month) |
| ICICI Bank (New Start Up Current Account) | Zero** | Free up to 50 times of MAB maintained during transaction month |
| IndusInd Bank (Indus Gold Current Account) | Rs 50,000 | Free up to Rs 6 lakh per month |
| Canara Bank (Privilege Current Account) | Zero** | Free up to Rs 5 lakh per day |
| Yes Bank (Business Value Current Account) | Rs 10,000 | Free up to 2 lakh per month |
| Punjab National Bank (PNB Silver Current Account) | Rs 5000* | Free up to Rs 2 lakh per day |
| Axis Bank (Normal Current Account) | Rs 10,000 | Free up to Rs 2 lakh per month |
Note: For PNB Silver Current Account, the initial balance required is Rs 5000, but the account holder must maintain a minimum quarterly average balance of Rs 1 lakh.
*The mentioned amounts are to be maintained quarterly by the account holders.
**These are the initial account opening balances; however, users must maintain the average monthly or quarterly balance as per the chosen account variant.
Banks have different types of current accounts to suit their customers' banking needs. It's important to choose the right account based on the transactions you plan to make. Here are some common types of current accounts offered by many banks. Keep in mind that the options might differ depending on the bank you go with.
1. Basic Current Accounts – This account is good for people who don't earn a lot, like retirees or young people. It helps them handle their money more easily. But, there are limits on how much cash you can take out each day.
2. Standard Current Accounts – This kind of account asks customers to keep a certain amount of money in it every month. It doesn't give any interest on the money you put in. But, it provides things like a checkbook, debit card, and overdraft (which means you can spend more than you have in the account, up to a limit).
3. Foreign Currency Accounts – Foreign Currency Accounts are available for Non-Resident Indians (NRIs) or individuals who need to do a lot of transactions using foreign currencies.
4. Packaged Current Accounts – This type of current account gives account holders many extra advantages. It includes special features like medical help, travel insurance, and other benefits.
5. Premium Current Accounts – This account offers special offers and advantages to its customers. It's great for doing big transactions.
Current accounts are created by banks to meet the banking and financial requirements of businesspeople, traders, and professionals. Here are some key features and benefits:
Any individual with acceptable KYC documents can open a current account at a bank. You can go to any bank with the necessary documents to open one. Current account holders must keep a minimum monthly average balance (MAB) in their account; otherwise, they may face penalties. Here is the eligibility criteria that individuals need to meet to open a current account in India:
Here's a list of documents needed to open a current account. These documents prove your name, address, and what you do. Remember, the specific documents required might differ depending on the bank and the type of account you choose.
| Documents Required |
|---|
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You need to submit one of the following documents for both identification and address proof along with the current account opening form:
| Address Proof |
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| ID and Signature Proof |
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The primary reason for opening a current account is to smoothly conduct all business transactions. It enables customers to handle bulk transactions and large payments conveniently. Therefore, selecting the right account is crucial. Consider all the factors carefully when choosing the most suitable bank account option. Here are the essential factors to keep in mind when making the right current account choice:
Cash Deposit Limit: The amount of cash you can deposit for free each month may differ depending on the bank and the type of account you have.
Minimum Balance: The minimum amount of money that must always be in your account to keep it active is higher for a current account compared to a savings account. This minimum balance requirement varies depending on the type of account you choose.
Fees, Charges and Overdraft Costs: Different accounts have different fees and charges. You need to pay attention to important things like charges for withdrawing cash, fees for demand drafts, transferring funds, overdraft costs, and more.
Individuals, private and limited companies, partnership firms, Hindu Undivided Families (HUFs), trusts, and other entities can open a current account.
In India, all banks offer different types of current accounts. However, when considering the factor of maintaining a minimum balance, ICICI Bank and Axis Bank provide the option of a Zero Balance Current Account.
No, you don't need to have GST registration to open a Current Account.
It's important to know the minimum balance requirement for each type of current account offered by the bank. Account holders should make sure to keep their account balance at least as much as the minimum balance required for their current account.