What is Current Account — Meaning, Types, Features, Eligibility, and more

Posted on Thursday, November 10th, 2022 | By IndusInd Bank

If you own a business, you would be well-aware of the need for smooth financial management and uninterrupted cash flow, for which a current account is essential. So, what is a current account? While a savings account is suitable for individuals and their daily transactions, which are usually of a lower volume, a current account is designed for the specific needs of businesses.

To define a current account, it is a type of account catering to enterprises or organisations that have a higher number of transactions of larger volumes with banks. One of the distinct current account features is that there are no (or minimal) limits on daily transactions and cash deposits/withdrawals.

Let’s explore what a current account is, its types, features, eligibility, and more to help you make well-informed decisions.

Features & Benefits of a Current Account 

Let’s begin by looking at the major current account features and benefits:

· Ability to Handle Larger Volumes of Payments

A current account makes it easy to handle large payments. This is because it comes with fewer restrictions on the number of transactions, fewer charges/fees on deposits, and unlimited withdrawals.

· Overdraft Facility

When trying to understand current account meaning, you will come across the term ‘overdraft facility’. This allows you to withdraw more than your current account balance, up to a specified limit. This helps during shortages in cash flow.

· Digital Payment Solutions

Nowadays, many current accounts come with digital payment solutions, like POS terminals, QR code payments, and payment gateways to facilitate cashless payments.

· Easy Fund Transfer Options 

A major current account benefit is that you enjoy access to easy fund transfers through free NEFT, RTGS, and IMPS facilities. So, you can make quick payments and collections without incurring charges.

· Other Services

Also, enjoy a host of other current account features and benefits, such as the account grouping feature. Here, you can group your current account and savings accounts to reduce the hassle of managing each account separately. Other benefits include digital banking services, no monthly balance requirements (for some accounts), the auto-sweep deposit feature, doorstep banking services, and more.

Now that you know the meaning of a current account and its features, let’s learn about the eligibility criteria for a current account.

Eligibility Criteria to Open a Bank Current Account 

You are eligible to open a current account if you fall under one of the following categories. 

• Resident Individual 
• Hindu Undivided Family 
• Sole Proprietorship Firms 
• Partnership Firms 
• Limited Liability Partnership Firms 
• Private and Public Limited Companies 
• Trust, Associations, Societies, Clubs, etc.

Now that you know about the eligibility criteria for a current account, let’s find out what type of current account would work best for you. 

Types of Current Account 

Depending on your business needs, you can choose one from the different types of current accounts explained below:

· Standard Current Account

A basic current account with a fixed minimum balance and monthly average balance requirements. It comes with key features, like an overdraft facility, chequebooks, limitless withdrawals, and more. You may not enjoy current account interest rates with this type.

· Premium Current Account

Best suited for large businesses that carry out large transactions, in volume and in value. It offers features such as dedicated relationship teams, airport lounge access, rewards and cashback, and more.

· Digital or Startup Account

Designed for startups or online businesses. Account holders come with easy-to-use digital banking tools, minimal documentation, and no minimum balance requirements​.

· Foreign Currency Current Account

Allows one to transact in multiple currencies and is best suited for businesses that deal with international trade and/or clients.

How to Open a Current Account Online?

Interested in opening any of the above accounts? Here’s a guide to help you understand the process.

To open an account digitally, follow these steps:

• Click here, fill in your details, and follow the instructions to complete the application process online.

For those who prefer an in-person experience, you can visit the nearest IndusInd Bank branch. A representative will guide you through the application process.

What are the Documents Required to Open a Current Account?

Here’s a list of the documents needed to open a current account as per the business structure:

· Sole Proprietorship 

  – Two documents in the entity’s name

  – Entity address proof 

  – Proprietor’s photo, PAN card, and an Official Valid Document (OVD).

· Hindu Undivided Family (HUF) 

  – HUF and Karta’s PAN cards 

  – Karta’s OVD 

  – HUF declaration and KYC for HUF as address proof.

· Partnership 

  – Partnership deed and declaration 

  – Entity PAN card and address proof 

  – Partners’/Signatories’ photos, PAN, and OVD.

· Limited Liability Partnership (LLP) 

  – LLP agreement, incorporation certificate, and firm declaration 

  – PAN card and address proof for the entity 

  – OVD of designated partners/signatories

  – MOA & AOA, incorporation certificate, board resolution 

  – Entity PAN, address proof, and OVDs for directors/signatories.

The document list can differ as per the type of business structure.

Make Business Easy with an IndusInd Bank Current Account       

When you open a current account with IndusInd Bank, you enjoy benefits like:

• Paperless digital account opening process (for sole proprietors and individuals).
• Industry-specific current accounts to help you enjoy features that suit your business.
• Option to choose an account number of your choice, to give a personalised edge to your business.
• Multiple access channels, such as a wide network of branches, a mobile app, net banking portal, and more.
• Doorstep banking services, such as cheque pickups and on-call cash pickups, to relieve you of urgent banking needs.

Choose Different Current Account Options From the Below Categories That Best Suit Your Business & Apply Now

• Indus Business Account 
• Indus Select Business Account 
• Trade Account 
• Industry Specific Account 

Current Account Tips to Keep in Mind

• Read the schedule of charges with care. Keep in mind the guidelines for initial funding and minimum balance requirements for your preferred account type. 
• Compare the different types of current accounts offered by your bank before picking the one that best fits your business needs. 
• Bear in mind the operational costs while finalising the type of current account. 
• Read about and be prepared with the criteria for the current account, as well as its required documentation. Depending on the business structure, you may require more or fewer documents. 
• Not all current accounts offer interest rates. Hence, do not be surprised if your preferred one does not.

Difference between Current Account & Savings Account

Here are the key differences between a current account and savings accounts:

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision.  IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.