Current accounts have very unique features since they cater specifically to business owners. They have key features like high transaction limits and no interest rate on deposited funds. Read on to know everything about current accounts.
What is a current account, and what are its key features?
A current account is a bank account that helps a business owner manage the cashflow of their business. It helps them account for their business transactions by offering more flexible limits on monthly cash withdrawals and deposits. Here are the key features of current accounts. Certain key features of current accounts include access to the overdraft facility, higher transaction limits for customers, high liquidity, and no interest rate on deposited funds (unlike savings accounts).
Major benefits of current accounts:
- You can manage your business’s cashflow very easily: You can track your business’s daily transactions very conveniently using a current account. These accounts set a very high daily transaction limit to help business owners manage their cashflows easily.
- Current accounts facilitate fast digital payments: You can transact via UPI (unified payments interface), RTGS (real-time gross settlements) or IMPS (immediate payment service) conveniently using a current account. These accounts also offer payroll management services to help businesses organise their cashflows.
- These accounts offer valuable creditworthiness insights to financial institutions: A current account can offer valuable insights to financial institutions regarding the creditworthiness of the business owner. This can help the business owner avail loans in the future by demonstrating a good credit history.
- They offer the overdraft facility to business owners: Business owners can also benefit from the overdraft facility offered by most online current accounts. This facility helps a business owner withdraw extra money from their current account in the event of a financial emergency up to a certain limit. This facility helps business owners keep their businesses afloat during financial emergencies.
- Current accounts also offer mobile banking and internet banking services: In 2024, most current accounts held by business owners in India are accessed through mobile banking apps and internet banking accounts. Banks are offering key features through their mobile banking apps to help business owners conveniently access their current accounts.
How to open a current account?
You can open a current account online or by visiting a bank branch. Here is how you can do it by visiting a bank branch –
- Visit a bank branch of the bank in which you wish to open a current account.
- Fill the current account application form and produce the required documents as specified by the bank (their original and photocopied versions).
- Fund your account and await its activation.
Here is how you can open a current account online:
- Visit the bank’s official website and fill its online current account application form.
- Select the current account type.
- The bank’s representative will call you and take you through the procedure of opening an online current account.
You must check the mobile banking services and customer services offered by a bank before signing up for its current account.
