The best current account for your business

Current bank accounts are very popular among companies, firms, public enterprises, businessmen who generally have higher numbers of regular transactions with the bank. The current account includes deposits, withdrawals, and contra transactions. Such accounts are also called the Demand Deposit Account.

Features of Current Bank Account

The main features of current account are as follows:-

• Current bank accounts are operated to run a business.
• It is a non-interest bearing bank account.
• It needs a higher minimum balance to be maintained as compared to the savings account.
• The penalty is charged if the minimum balance is not maintained in the current account.
• It charges interest on the short-term funds borrowed from the bank.
• It is of a continuing nature as there is no fixed period to hold a current account.
• It does not promote saving habits with its account holders.
• Banker requires KYC (Know your Customers) norms to be completed before opening a current account.
• The main objective of the current bank account is to enable businessmen to conduct their business transactions smoothly.
• There is no restriction on the number and amount of deposits.
• There is also no restriction on the number and amount of withdrawals made, as long as the current account holder has funds in his bank account.
• Generally, the bank does not pay any interest on the current account. Nowadays, some banks do pay interest on current accounts.

Advantages of having a Current Account

• Current accounts allow handling of large volumes of receipts and/or payments systematically
• Under these accounts, limitless withdrawals are allowed in line with the levied cash transaction fees.
• There are no restrictions applied on the deposits made into the current accounts opened at the bank’s home branch. Additionally, account holders can also deposit cash at other branches upon paying small fees as applicable.
• Cheques, pay-orders, or demand-drafts can be issued via a current account for making direct payments to creditors.
• Overdraft facilities are also available for current account holders.
• The presence of small interest earnings on account balance makes a current account all the more attractive for its users.
• Businesses are further advantaged with various other benefits in the form of free inward remittances, deposits and withdrawals at any location, multi-location transfer etc.
• The businessmen can withdraw from their current accounts without any limit, subject to banking cash transaction tax if any levied by the government.
• Assists creditors of the account holder who can have access to information on the account holder’s creditworthiness through inter-bank connection.
• It facilitates the industrial progress of the country. Without its help, businessmen would face difficulties in running their businesses.
• Provides Internet banking and mobile banking to enable businessmen to carry out important business transactions promptly and with ease.
• It also provides various other advantages (benefits) such as:
  • Deposit and withdrawal of money (cash) at any location.
  • Multi-location funds transfer.

Disadvantages of having a Current Account

• There is an opportunity cost of losing on the interest rates due to low or zero interest on money in the current account.
• There is an operational burden attached since most package accounts offer services at additional costs.
• The involved paperwork and fine print serve to be lengthy and confusing.
• Huge fees due to corporate business transactions.
• There is a limit on the number of funds that can be withdrawn in a day.

Documents required for opening a current account by a public company

• Documentation for Entity Proof – (any one of the following documents)

1. MOA
2. AOA
3. Certificate of Incorporation
4. Certificate of Commencement of Business
5. Board Resolution
6. PAN Card

• Entity Address Documentation- (any one of the following documents)

1. Certificate of Registration
2. Business Licence issued by state- central govt.
3. Sales Tax 2
4. IT return Certificate
5. VAT Certificate
6. PAN Intimation letter
7. Import-Export certificate
8. Registration Cert with PF commissioner
9. Form 18

• Individual documentation: (Identity Proof - anyone of the following documents)

1. PAN Card
2. Driving Licence
3. Passport
4. ID cards issued central & state govt.
5. Passbook scheduled commercial bank
6. Marriage certificate
7. Voters ID card
8. Aadhar Card

• Signature Proof - (any one of the following documents)

1. PAN Card
2. Driving Licence
3. Passport
4. ID cards issued central & state govt

Documents required for opening a current account by a private company

1. Account Opening Form (AOF)
2. Beneficial Ownership (BO)
3. Documentation for Entity Proof - (any one of the following documents)
4. MOA
5. AOA
6. Certificate of Incorporation
7. Board Resolution
8. PAN Card
9. Entity Address Documentation- (any one of the following documents)
10. Certificate of Registration
11. Business Licence issued by state- central govt.
12. Sales Tax 2
13. IT return Certificate
14. VAT Certificate
15. PAN intimation letter
16. Import-Export certificate
17. Registration Cert with PF commissioner
18. Form 18
19. Individual documentation (Identity Proof - anyone of the following documents)
20. PAN Card
21. Driving Licence
22. Passport
23. ID cards issued central & state govt.
24. Passbook scheduled commercial bank
25. Marriage certificate
26. Voters ID card
27. Aadhar Card
28. Signature Proof - (any one of the following documents)
29. PAN Card
30. Driving Licence
31. Passport
32. ID cards issued central & state govt

Documents required for opening a current account by a partnership company :

1. Account Opening Form (AOF)
2. Beneficial Ownership (BO)
3. Documentation for Entity Proof
4. Partnership Deed
5. Partnership Declaration
6. Partnership Entity
7. PAN Card
8. Entity Address Documentation- (any one of the following documents):
9. Entity proof (above if it contains address)
10. Water-electricity- telephone bill
11. Property tax certificate
12. One-month existing account statement
13. Property ownership deed
14. Leave-licence agreement
15. Individual documentation: (Identity Proof - anyone of the following documents)
16. PAN Card
17. Driving Licence
18. Passport
19. ID cards issued central & state govt.
20. Passbook scheduled commercial bank
21. Marriage certificate
22. Voters ID card
23. Aadhar Card
24. Address Proof - (any one of the following documents)
25. Driving Licence
26. Passport
27. ID cards issued central & state govt.
28. Passbook scheduled commercial bank
29. Utility Bill
30. Marriage certificate
31. Municipal corporation bill
32. Credit Card Bill
33. Registered Leave and Licence Agreement
34. Bank statement
35. Tax certificates
36. Aadhar Card
37. Signature Proof - (any one of the following documents)
38. PAN Card
39. Driving Licence
40. Passport
41. ID cards issued central & state govt.

Documents required for opening a current account by a sole-proprietor:

1. Account Opening Form (AOF)
2. Documentation for Entity Proof- Any two of the following:
3. Certificate of Registration
4. License-related to Central-State govt.
5. Certificate related to Municipal authorities
6. Tax returns-certificate (Sales/ VAT/ Wealth)
7. SEBI Registration
8. IEC certificate
9. CA certificate
10. Registered lease/licence
11. Utility Bills
12. TDS certificate
13. PAN Card
14. Entity Address Documentation- (any one of the following documents)
15. Entity proof (above if it contains address)
16. Water-electricity- telephone bill
17. Property tax certificate
18. One-month existing account statement
19. Property ownership deed
20. Leave-licence agreement
21. Individual documentation (Identity Proof - anyone of the following documents)
22. PAN Card
23. Driving Licence
24. Passport
25. ID cards issued central & state govt.
26. Passbook scheduled commercial bank
27. Marriage certificate
28. Voters ID card
29. Aadhar Card
30. Address Proof (any one of the following documents)
31. Driving Licence
32. Passport
33. ID cards issued central & state govt.
34. Passbook scheduled commercial bank
35. Utility Bill
36. Marriage certificate
37. Municipal corporation bill
38. Credit Card Bill
39. Registered Leave and Licence Agreement
40. Bank statement
41. Tax certificates
42. Aadhar Card
43. Signature Proof (any one of the following documents)
44. PAN Card
45. Driving Licence
46. Passport
47. ID cards issued central & state govt.