Current Account

Savings Account
Savings account as the name suggests, is for saving your money for a long term. Here are
some of the most prominent features of a savings account:
 In this account, there is a fixed interest earned on that you deposit.
 The minimum balance in savings account is lesser compared to current account.
 Interests deposited by banks are beneficial for future Emergencies.
Current Account
Current account is usually an account opened when there would be frequent transactions
involved. Some of the features include:
 Current account is for making quick transactions.
 They come with a myriad of facilities like overdrafts, no limit on withdrawals or
deposits and more.
 There is no limit on number of transactions
 Features are suitable for business purposes
Savings Account Vs Current Account
Interest
Savings Account: Earn interest on savings
Current Account: No interest earned on deposited money
Number of Transactions
Savings account: After certain amount of transactions, there are high charges
Current Account: There is no cap on number of transactions.
Suitability
Savings account: Suitable for individuals to deposit salaries and also for saving funds for
emergencies.
Current account: Suitable for business enterprises and institutions that make frequent
transactions.
Required Balance
Savings Account: The required minimum balance in savings account it low.
Current Account: The required minimum balance is higher compared to savings account.
Current bank account is opened by businessmen who have a higher number of

regular transactions with the bank. It includes deposits, withdrawals, and contra
transactions. It is also known as Demand Deposit Account.
Current account can be opened in co-operative bank and commercial bank. In
current account, amount can be deposited and withdrawn at any time without giving
any notice. It is also suitable for making payments to creditors by using cheques.
Cheques received from customers can be deposited in this account for collection.
In India, current account can be opened by depositing Rs.5000 to Rs. 25,000. The
customers are allowed to withdraw the amount with cheques, and they usually do not
get any interest. Generally, current account holders do not get any interest on their
balance lying in current account with the bank.
Current account holder get one important advantage of overdraft facility.
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.
 Penalty is charged if 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 current bank account is to enable the 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, bank does not pay any interest on current account. Nowadays,
some banks do pay interest on current accounts.
To open a Current Account, all you need to do is:

 Check your eligibility criteria for opening a Current Account. Most banks have
very liberal eligibility criteria for opening a Current Account. NRIs can open a
Current Account out of the proceeds from an NRO (Non-Resident
Ordinary)/NRE (Non-ResidentRupee)/FCNR (Foreign Currency Non-
Resident) account only. This amount will not be available for repatriation
outside India.
 Download the account opening form from the bank’s website. Alternatively,
this form will also be available at any bank branch that is nearest to you.
 Fill up the opening form with all the relevant and necessary details.
 Collect the list of documents that will be required by the bank. If you already
are a customer of the bank and are complying with KYC regulations, you may
have a different list of documents that will be needed by the bank. Therefore,
it is essential to confirm the list.
Some of the documents required for opening a Current Account are:
 Proof of the existence of the business
 Proof of address of the business
 KYC of the proprietor
 Tax registration documents
 Licences from relevant authorities.
There are several benefits of operating a current account for business owners:
 Any time withdrawal facility to meet the cash needs of the business.
 A current account holder can deposit cash or cheques at different bank
branches which makes it extremely convenient to collect payments from small
customers.
 Availing an overdraft facility against a current account is easy. Having an
overdraft helps meet the working capital needs of the business at any point
Here are 5 benefits of having a Current Account:
 Segregate business finance from personal finance

 Professionalism in business
 Ability to prove creditworthiness
 Overdraft facility
 Ease in banking transactions

Current Account

Uploaded by

Copyright:

Available Formats

Current Account

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Current Account

Uploaded by

Copyright:

Available Formats

Savings Account

Current bank account is opened by businessmen who have a higher number of

The main features of current account are as follows:-

 Current bank accounts are operated to run a business.

To open a Current Account, all you need to do is:

 Segregate business finance from personal finance

You might also like