Benefits of Current Account for Businesses

Current account is widely known as the type of bank account that offers flexible payment options and access to funds compared to other types of bank accounts. Such accounts are maintained solely or jointly by businesses for carrying out large-value transactions regularly. Unlike savings accounts, these accounts relate to liquid deposits and do not provide interest. 

Current accounts are mainly opened by businessmen, sole proprietors, partnership firms, public or private companies, etc. However, the Current Account minimum balance requirement and maintenance of monthly average balance (MAB) varies from bank to bank.

Read this blog to understand the current bank account in detail.

Features and Benefits of Current Account

Current Account are offered by banks to cater to the financial needs of businessmen, companies, both public and private, traders, etc. Below are a few features of a current account:

• KYC guidelines must be followed to open a current account, in the same way, it is done for a savings account
• Current account holders can make direct payments using cheques, demand drafts, or pay orders

• Current accounts offer unlimited transactions to account holders
• There’s no limit on withdrawals and deposits
• Customers are offered overdraft facilities
• Provides frequent transactions such as Fund Transfers
• A feasible option for business transactions
• With current accounts, account holders can enjoy online banking services
• A current account holder is never short of cheque leaves
• Helps to segregate personal and business finances
• Banks offers value-added services at no extra cost to current account holders in comparison to savings accounts

Eligibility Criteria for Current Account 

Any individual, sole proprietor, partnership firms, limited companies, HUFs, Trusts, etc., are eligible to open a current account by submitting the acceptable KYC documents. Moreover, a minimum monthly average balance must be maintained to avoid penalties.

Documents Required for Current Account

• PAN Card
• ID Proof and Address Proof of all directors/partners
• A cheque for opening a bank account
• Partnership Deed (in case of Partnership Firm)
• Certificate of Incorporation, MOA and AOA (in case of Companies)
• Certificate by Sales Tax or Service Tax authorities (in case of Proprietorship Firm)
• Address Proof of the Firm/Company/HUF
• A cheque for opening a bank account
• Passport Size Photographs

Frequently Asked Questions

What is Monthly Average Balance (MAB)?

The Minimum Average Balance (MAB) is the amount of money that must always be present in the account to prevent it from deactivating or lapsing. The minimum balance value for the current bank account is relatively higher than a savings account.

Is it mandatory to have a GST number for opening a current account?

No, having a GST number to open a current account is not compulsory.