- In a savings bank account, you can withdraw the same amount as the bank has given the limit, but in the current bank account you can do unlimited transactions.
- You do not get any interest on the amount deposited in the current account but it is given in the savings account.
- You can open a zero balance account in savings account also, but you have to maintain minimum balance in current account otherwise you will be charged for it.
Current Account is an account with no limit on transactions. Transactions can be done in a day and hence are also known as Transactional Accounts. These types of accounts are held neither for investment purpose nor for savings purpose but only for the convenience of trading as these accounts are the most liquid type of accounts. Banks engaged in these accounts; do not pay any interest on the amount and in some cases even charge a small fee for the services they provide. These types of bank accounts are usually opened by businesses because there is the high side of the transaction.
The following documents are required to open a current account in India:
- Pan Card
- Shop Act Licence (Gumasta)
- Partnership Deed (in case of Partnership Firm)
- A check for opening a bank account
- Address Proof of Firm/Company/HUF
- ID and Address Proof of all Partners/Directors/Members
- And some other documents as per bank’s policy
Current Bank Accounts offer everything you would normally find in personal accounts like cash and check handling, direct debit and standing orders, NEFT, mobile banking, debit/credit cards and overdrafts etc. But unlike a personal savings account, you will be charged for the transactions done on your current account, so it is always better to analyze what you need and what the banks have to offer to provide the benefits and both of them. It’s like choosing mobile plans! For example: If you do more transactions then select the bank that transacts to more banks.
Shop Act Licence is one the most important document if you’re planning to open current account with any of bank. All Indian banks are allowed to open current accounts. You can approach any bank with requisite documents and submit all the details in the application form successfully, the banker will verify all the documents and on being satisfied, they will open your current account.
Current Account users are also required to maintain a minimum quarterly average balance in their accounts. The minimum quarterly average balance norm in most banks is Rs. 5000-25000.
When selecting a bank account, you need to be aware of a few things:
Location: The first point is the location of the bank branch. A bank should be near your business location and should be accessible as per your business requirement. It should provide internet banking, mobile banking and good ATM network/bank network as per your business requirement.
Overdraft Limit: The bank should also take into account the overdraft limit given by the bank
Minimum Average Monthly Balance: Minimum Average Monthly Balance is one of the important factors for selection. If you are starting your business at the initial level, you will need funds, so it is better to choose an account with minimum or zero average monthly balance.
Service Charges: The service charges levied on various facilities like demand draft, check book facility, online fund transfer; debit card etc. should also be compared with all banks.
The account holder will also be required to comply with all KYC norms. If you do not have all the above documents, you can refer to this link which provides the list of optional documents if the above mentioned documents are not available.
Almost all banks offer debit card, mobile banking and internet banking facilities for current account users. However, they may charge a small fee for such services.