What is Current Account? How to Open Current Account,Minimum A/c Balance,Interest Rate,Advantages

Overview of Current Account

Banks offer different types of accounts to the customers for deposits which are designed to serve different purposes. One of such accounts is a 'Current Account'. A Current Account is an account that is specially designed for Businessmen, Traders and Professionals. It usually allows unlimited number of transactions daily.

Current Accounts are generally used for making liquid transactions. Most of the banks offer a number of customised current account focussing specific needs of varied customers. Current Account enables the account holders to conduct their business transactions smoothly.

Features of Current Account

• Current Account can be opened only after completion of Know Your Customer (KYC) norms.
• Current account has continuing nature and there is no fixed tenure of deposit kept in it.
• As current account is not meant for regular saving, interest on deposit in current account is not paid.
• More than one current account should not be opened for the same business entity.
• Account holder is required to maintain Minimum Average Balance (MAB) as prescribed by the bank.
• There is no cap on number of transactions in current account in most of the banks.

Advantages of Current Account

• Over Draft (OD) Facility
• Free Fund Transfers through NEFT/ RTGS
• Free Local Collection through Cheques
• Easy Inter City Transactions
• Easy Withdrawal of Funds
• No limit on the number of withdrawals/ deposits
• Higher Cash Deposit Limits
• Daily Unlimited Transaction
• Flexi-Seasonal Benefits
• Free Demand Drafts & Pay Orders
• Free Payable at par cheque leaves per month
• Creditworthiness is improved

Interest Rate on Current Account

Usually banks don't offer any interest on the deposits in Current Account. Now-a-days some banks have started offering an interest on current account deposits but the rate is very low.

Minimum Account Balance (MAB) Requirement for Current Account

A higher Minimum Account Balance needs to be maintained in Current Account as compared to that of Savings Account. The limit of the same is decided by the banks and differs from bank to bank.

Eligibility to Open a Current Account

Persons falling under any of the following categories can open a Current Account:

• Resident Individual
• Hindu Undivided Family (HUF)
• Sole Proprietorship
• Partnership
• Private Limited Company
• Public Limited Company
• Trust
• Association
• Club
• Society
• Limited Liability Partnership (LLP)
• Foreign Institutional Investor (FII)
• Foreign National Residing in India

Types of Current Account

It is very general type of current account that provides all the basic facilities of a Current Account. It allows multiple number of transactions, online banking facilities, overdraft facilities, cheque book facility, etc. It is an ideal low cost account for businesses that operate in one city.

It allows to transact in cash only. It doesn't provide any facility of cheque book, netbanking and overdraft facilities.

It offers special and exclusive offers to its account holders. It is offered to persons who want to make high value transactions through this account.

This is a customised account particularly designed to suit the needs of a special category of persons.

A current account designed for start ups that offers transaction benefits on the basis of Monthly Average Balance (MAB) maintained in the account. It has zero Monthly Average Balance (MAB) requirement for initial few months. It helps accelerate their growth.

It is designed to focus the businesses with high seasonal requirement which offers dynamic cash deposit limits to match business seasonality and in this way it helps in reducing cost.

This is designed for the customers who generally transact in foreign currencies. It offers low transaction cost to deal in foreign currencies and give best exchange rates.

This type of current account is especially designed for Trusts, Associations, Societies, Clubs, Non Profit Organisations and Government Departments offering exclusive benefits to the account holders.

Difference between Current Account & Savings Account

The main objective of current account is to entertain maximum number of transactions while savings account encourages customers to make more savings.

Savings Accounts are opened by the individuals mainly by salaried persons whereas Current Accounts are opened by Non-individuals like HUF, Proprietors, Partners, Companies, etc.

Savings Accounts offer periodic interest on deposits which ranges between 3.5% to 7% while Currents Accounts generally don't offer any interest. However, some banks have started offering low interest now-a-days.

Current Accounts offer Bank Overdraft facility to the customers whereas Savings Account don't offer such a facility to the customers.

A higher Minimum Account Balance needs to be maintained in Current Account as compared to that of Savings Account. The limit of the same is decided by the banks and differs from bank to bank.

As the Current Accounts are opened with an objective of carrying out very frequent transactions, they don't usually put any cap on number of transactions. Savings accounts usually put a limit on the maximum number of transactions which ranges between 3 to 5 transactions per month. After crossing these limits, the customers need to pay charges on additional transactions done by him.

How to Buy FASTag from E-commerce Website?

How to Buy FASTag from E-commerce Website?

1. Amazon will provide you with an online activation link
2. Click on the activation link
3. Then provide your KYC documents
4. Also provide your vehicle details for which you want to buy FASTag
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Current Account Document Required