How To Open Current Account in India

A Current Account is a bank account used for business. It is mostly used by organisations, professionals, societies, trusts, clubs, etc. While you may know how banks operate different accounts, it is essential to know that most banks provide excellent flexibility and convenience to Current Account holders, particularly, when it comes to operating the account.

And one of the most important features is that there are no restrictions on cash deposits or cash withdrawals. Another essential feature is that Current Account holders get a certain number of free cheques to use every month, unlike savings account holders who are restricted to a certain number of cheques each year and need to pay an additional charge for a new chequebook.

1. What is a Current Account?

A current account is a type of bank account that allows individuals or businesses to deposit and withdraw money as and when they need it. It is also sometimes referred to as a checking account, transactional account or demand deposit account.

Current accounts are typically used for everyday transactions such as paying bills, receiving salary, and making purchases. They often offer features such as debit cards, online banking, and overdraft facilities.

Unlike savings accounts, current accounts generally do not pay interest on balances, although some banks may offer nominal interest rates on the account balance. In addition, some banks may charge fees for using certain features of the account or for transactions beyond a certain limit.

Overall, current accounts are an essential tool for managing day-to-day finances and conducting transactions with ease.

2. How to open a Current Account for start-ups:

To open a current account for a start-up, follow these steps:

1. Choose a bank: Research and compare different banks to find one that meets your start-up’s needs. Look for a bank that offers low fees, good customer service, online banking, and other relevant services.
2. Gather the required documents: You’ll need to provide some documentation to open a current account, such as proof of identity, proof of address, and company registration documents. Check with the bank to see what specific documents they require.
3. Complete the application form: You can usually apply for a current account online or in person at a bank branch. Provide all the necessary information and documentation, and answer any questions the bank may have.
4. Meet any requirements: Depending on the bank, you may need to meet certain requirements to open a current account. For example, some banks may require a minimum deposit, minimum balance, or a certain level of monthly transactions.
5. Wait for approval: After you’ve submitted your application, the bank will review it and decide whether to approve your current account. This can take a few days to a few weeks, depending on the bank and the complexity of your application.
6. Activate the account: Once your account is approved, you’ll need to activate it before you can start using it. Follow the bank’s instructions to activate your current account, and you’re good to go!

Opening a current account for your start-up can help you manage your finances more efficiently and professionally. Just make sure to choose a bank that meets your needs and provides the features and services that are most important to you.

3. What Documents required to open a Current Account?

The specific documents required to open a current account may vary depending on the bank and the type of account, but generally, you will need to provide the following:

1. Proof of identity: This can be a valid government-issued ID card such as a passport, driver’s license, or national identity card.
2. Proof of address: You will need to provide a document that shows your current residential address, such as a utility bill, bank statement, or rental agreement.
3. Company registration documents: If you are opening a current account for a business, you will need to provide documents that show the business is registered, such as the certificate of incorporation, partnership deed, or Memorandum and Articles of Association.
4. Tax registration documents: You may need to provide your tax registration documents, such as your PAN (Permanent Account Number) or GST (Goods and Services Tax) registration certificate.
5. Business proof: You may also be required to provide proof of your business, such as a business card, letterhead, or website.
6. Other documents: Some banks may require additional documents, such as a reference from another bank or financial institution, or a business plan.

It’s important to check with the specific bank you are interested in to confirm the documents required to open a current account, as requirements may vary.

4. Benefits of Current bank accounts

Current bank accounts offer several benefits, including:

Easy access to funds: With a current account, you can deposit and withdraw money as and when you need it, giving you easy access to your funds.

1. Cheque payments: Current accounts allow you to write cheques, which can be used to make payments to others, such as suppliers or vendors.
2. Overdraft facilities: Some current accounts offer overdraft facilities, which allow you to borrow money up to a pre-agreed limit. This can be useful if you need to cover unexpected expenses or manage cash flow.
3. Debit cards: Current accounts often come with debit cards, which you can use to make purchases or withdraw cash from ATMs.
4. Online banking: Most current accounts offer online banking, which allows you to manage your account and transactions from anywhere, at any time.
5. Standing orders and direct debits: Current accounts allow you to set up standing orders and direct debits, which can help you manage regular payments, such as rent, utility bills, or employee salaries.
6. Merchant services: Some current accounts offer merchant services, which allow you to accept card payments from customers, making it easier to do business.

Overall, current accounts offer a range of features and services that can help individuals and businesses manage their finances more efficiently and effectively. However, it’s important to compare different accounts and choose one that best meets your needs and requirements.