What eligibility criteria must you meet before opening a Current Account?

01 AUGUST, 2023

Whether you operate a big or a small business, you must open a Current Account online or offline to conduct seamless business transactions. However, you must meet specific requirements to be eligible to open a Current Account. All individuals and organisations holding acceptable KYC documents and meeting the eligibility criteria set by the bank can open a Current Account. The eligibility criteria and the documents you must hold to open a Current Account follow. 

Who can apply for a Current Account? 

• Non-government organisations or charitable trusts
• Related parties
• Stock and share brokers
• Mutual funds/insurance companies
• Foreign banks
• Domestic banks/domestic co-operative banks/regional rural banks
• Public sector undertakings
• Religious organisations/government bodies/educational institutes
• Private limited companies
• Partnership/limited liability partnerships
• HUFs (Hindu undivided families)
• Sole proprietorships
• Individuals
• Co-operative society/Society/Trust

What are the documents needed for opening a Current Account?

• Business proof or organisational activities in the proprietary firm’s name. These documents include a license/certificate issued by municipal authorities as per the Shop & Establishment Act,CIN, GST/VAT/CST certificate, registration/certificate document issued by service tax/sales tax authorities, importer exporter code (IEC), complete ITR in the proprietor’s name where the entity’s income is displayed, license/certificate of registration as per government’s Statute/Act, TAN allotment letter by the NSDL in firm’s name or utility bills like landline, water and electricity bills. 

Additional Read: How can you handle your current account more effectively?

Why must you open a current account?

Current Accounts come with zero restrictions on the number of transactions allowed and thus are known as transactional bank accounts. Such accounts are opened neither for the purpose of saving nor investing. The account is opened to avail high transactional convenience for your business as such accounts allow a smooth flow of high funds.

Besides these, a Current Account comes with other important benefits like an overdraft facility, unlimited free demand drafts, free access to all international and domestic ATMs, free multi-city chequebooks, home banking service, free alerts via SMS and email, a dedicated relationship manager, efficient trade services and better forex rates, cash management services, point of sale solutions, payment gateway solutions, free 24X7 RTGS and NEFT via net banking or branch, free cash withdrawal at the home branch and up to a specific fixed limit at the non-home branch, etc. depending on the type of Current Account you choose to open. 

Owing to such available benefits, interest on the Current Account is nil. Also, the Current Account minimum balance requirement is higher than the Savings Bank Account. Note that the Current Account minimum quarterly balance may range between Rs. 10,000 and Rs. 15,00,000.

Ending note 

If you have a business, you must compare Current Accounts to choose the one that is best suited for your business. Doing so would allow you to avail flexible transactional limits for your business, like unlimited higher cash deposits and withdrawals and the ease of using an overdraft facility in times of fund shortages.