07 AUGUST, 2023

Every business, including startups and home-based businesses, requires a few things to get started. From registering the company name to securing the initial investment and a whole lot in between. One such crucial thing includes taking the time to open a Current Account online or offline that meets all the banking requirements of your business. While this may seem like a standard thing to do, there are certain things you should keep in mind while setting up and running a Current Account for business. In addition, here are some of those essential dos and don’ts.


  • Make use of introductory offers

For new customers to open a Current Account online or offline, many banks provide introductory offers where the fees are reduced or waived off for a certain period in the beginning. It is also advisable to seek the assistance of the bank’s customer service and Current Account managers, as they will help explain all the benefits and features to you. This way you can not only find out the kind of Current Account that best suits your needs but also take advantage of all the ongoing offers and discounts.

  • Choose a Current Account with a low AQB

Most Current Accounts come with a minimum Average Quarterly Balance (AQB) that needs to be maintained if you want to avoid penalty charges. This balance tends to be higher than the savings account minimum balance requirement. While you may find some zero-balance Current Accounts, it is not common. The AQB can range from anywhere between Rs. 10,000 to Rs. 2,50,000. You should make sure to open a Current Account that has a low AQB that you can easily maintain and that will not lock in your working capital. In addition, since Current Accounts do not pay interest on the balance, it is best to keep as little money as possible there.

Additional Read: A comprehensive guide to Current Accounts


  • Opt for features unnecessarily

When you open a Current Account online or offline, it will come with several features like free demand drafts and pay orders. However, there is often a caveat. Such features require you to maintain a certain AQB. For instance, a Current Account may offer 50 free demand drafts for every Rs, 1 lakh balance maintained. Depending on your business model and transactions, you may not require this. Instead, paying the demand draft charge, which is often minimal, may turn out to be more beneficial than trying to maintain a high balance unnecessarily.

  • Neglect your spending activity

Current Accounts often come with an overdraft facility, which is extremely helpful for businesses, irrespective of their scale or industry. However, if you do not keep regular track of your spending activity and things that are expensed to your Current Account, you may end up overspending. This will also help ensure that none of your cheques are bounced since that can negatively affect your credit score, which can be detrimental to your business.

While you may have to take some time to understand your business needs and accordingly decide what type of Current Account is best suited for it, do not delay this process. With benefits such as the overdraft facility, higher transaction limits, and more, a current account can provide your business with the support and service it needs to function smoothly. Go through our range of Current Accounts and open the one best suited for your business today!

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.