What is the Current Account?

Current bank accounts are extremely popular into businessmen, companies, firms, public enterprises, who generally have a higher number of normal transactions with the bank. The current account includes withdrawals, deposits, and contra transactions. Such accounts also are called the deposit account.

A current account will be opened in most of the commercial banks. A current account is a zero-account, is mostly related to huge transactions on a daily basis. Due to the fluidity that these accounts offer, they don’t earn any interest. These also usually don't carry a limit on the amount of transactions which may be made. In India, the current account may be opened by depositing Rs.5000 to Rs. 25,000. the purchasers are allowed to withdraw the number with cheque, and that they usually don't get any interest. You can open a current account of your firm or company anywhere in India.

You can hold unlimited cash in your current account. You can see your banker's check on which a saving or current account is written. Normal KYC is used to open a current account such as identity letter, PAN, photo, GST number, a stamp of the firm or company and the name of the person to use the account, and in some cases and banks, some additional papers may be asked.  You can change your current account to a savings account by giving an application at any time. If you do not use your current account till 6 months then it becomes dormant. You can change your authorized signatory to the current bank account, just by making an application in the bank.

Advantage of current account

• Current accounts allow handling of a large number of receipts and/or payments systematically

• Under these accounts, unlimited withdrawals are allowed in line with the levied cash transaction fee

• There are no restrictions applied on the deposits made among the current accounts opened at the bank’s home branch. Additionally, current account holders can also deposit cash at other branches upon paying small fees as applicable.

• Cheque, pay-order, or demand-draft can be issued via a current account for making direct payments to creditors.

• Overdraft facilities are also available for account holders.

• Businesses are an additional benefit with various other benefits within the kind of free inward remittance, deposit and withdrawal at any location.

• The businessmen can withdraw from their current accounts unlimited, subject to banking cash transaction tax if any levied by the government of India.

• Assists creditors of the account holder who can have access to information on the account holder’s creditworthiness through interbank connection.

• It facilitates the industrial progress of the country. Without using the current account facility, businessmen would face difficulties in running their businesses.

• Provides with net-banking, mobile-banking and BHIM App to enable businessmen to carry out important business transactions promptly and with ease.

Its also provides various many other benefits such as:

• Deposit and withdrawal of cash at any location.

• Multi-location funds transfer.

Disadvantages of the current account

• There is a chance cost of losing on the interest rates because of low or zero interest on money within the current account.

• There is an operational charged attached since the most package accounts offer services at additional costs.

• The involved paperwork and fine print serve to be lengthy and confusing.

• Huge fees because of corporate business transactions.

• There is a limit on the number of funds which will be withdrawn during a day.