There are different types of accounts that you can open in a bank depending upon your needs and requirements. The two most popular accounts are savings account and current account. While the savings account is quite popular on an individual level, the current account is widely used amongst businesses. By opening a current account, entrepreneurs can handle large volumes of payments or transactions efficiently. Moreover, having a current account also helps enterprises in proving their creditworthiness to the lender while availing credit for their business.
Let us go through some of its important features and learn how to open a current account with a bank.
Features of a Current Account
A current account enables smooth functioning of an enterprise by facilitating daily business transactions. With the help of a current account, you can make as many transactions in a day as you wish or need. Thus, a high level of liquidity is one of the most important benefits of having a current account.
The overdraft facility offered by the bank allows the account holders to withdraw more money than what they have in their account. Since business transactions are quite fluid and quick, there could be a gap in the inflows and outflows. In such cases, banks provide an overdraft facility so that a business can meet temporary monetary requirements with ease. However, banks usually charge an overdraft fee to the account holders for making use of the overdraft facility. Thus, you must check the overdraft charges of the bank before opening a current account with it.
You can easily deposit cash or cheques at different bank branches. This makes it extremely convenient to collect payments from many customers from different places, no matter how big or small.
Nowadays, current accounts come with online banking facilities. Thus, you can easily check the balance, pay bills, and make deposits in a hassle-free way from the comfort of your home. You do not need to visit the bank to find out the details.
Now that you are well aware of the various features of a current account, let us take you through the procedure to open a current account.
How to Open a Current Account?
To open a current account with a bank, follow the below-mentioned steps:
Step 1: Firstly, check your eligibility criteria for opening a current account by visiting the bank’s website.
Step 2: To open a current account online, you must download the account opening form available on the bank’s website. For the offline process, you must visit the nearest bank branch and collect the account opening form.
Step 3: Fill up the form with all the necessary details. Leading banks allow you to do this step online, without the need to download a copy of the form.
Step 4: Gather all the documents required for opening a current account. Some of the basic documents required account are:
- PAN Card
- Proof of the existence of the business
- Address proof of the business
- KYC of the proprietor
- Tax registration documents
- Licences from relevant authorities
- ID and address proof of all the partners/directors.
Step 5: Submit the form and the necessary documents. The bank will get back to you once the current account has been opened.
Now that you are aware of how to open a current account, make the most of it to facilitate business transactions. Before opening a current account, compare the various features offered by different banks and settle for the one that best suits your needs. Make a note of the maintenance charges, overdraft charges, monthly average balance requirement, etc. beforehand to avoid any inconvenience later.