All You Need to Know to Open a Current Account
May 21, 2021
The banking world today has advanced leaps and bounds. There exist a number of ways in which individuals can store their money and conduct transactions through banks. Of these, the Current Account is a viable means for individuals who incur a significant number of transactions on a regular basis. This write-up helps answer questions like “What is a Current Account?”, “What do I need to open a Current Account?”, “Can I open a Current Account without a GST?” and “What are the benefits of a Current Account?”
What is a Current Account?
A deposit account of sorts, the Current Account caters to individuals who engage in a number of transactions, exceeding the ordinary amount with banks on a regular basis. Available for immediate access, this account allows account holders to take advantage of a broad range of customisable options, which enhance financial dealings. In case of a Current Account, its holders are entitled to make payments in the form of cheques. Unlike savings accounts, Current Accounts don’t ordinarily enforce interests. Furthermore, they require a higher minimum balance to be maintained at all times. As a Current Account holder, it is possible to avail the overdraft facility, although this is only applicable up to an agreed upon limit.
Documents required for a Current Account
In order to become a Current Account holder, the following documents must be submitted to the bank of your choice.
- Proof of identity of the individual opening the account, such as a PAN Card, Voter ID, Passport and / or Driving Licence
- Proof of Address for future communication. An individual may show a telephone or electricity bill in order to establish the same
- A cheque from an existing Savings Account
- A colour photograph of the applicant/s
- Certificate of Incorporation and Memorandum of Association are required in the case of companies and trusts
- Companies should provide an address at which they can be reached
- Partnership agreement is required in the case of partnership firms
- Identity and residence proof pertaining to all partners.
Upon submitting these documents, a bank representative completes all other account opening formalities such that the Current Account can be formed, once the criteria is met.
Advantages Current Accounts Provide
Current Accounts allow for their account holders to avail of a number of benefits including but not limited to the following:
- Efficiency of business transactions – business assets are clearly allocated within this account and disjointed from the business owner’s personal assets. Transactions can be carried out with ease and statements indicate exactly who they were conducted with
- Limitless withdrawals and transactions allow individuals to conduct their business at a pace they choose – regardless of how fast it may be
- Account holders can rest easy knowing that there aren’t any limits on deposits made in their home branch
- Account holders can take advantage of the Overdraft facility, wherein the bank allows for withdrawals to be made, which exceed the amount of money the account holder presently has. The extent to which this is acceptable is pre-agreed
- With a Current Account, it is possible to carry out direct payments with the aid of a cheque, Demand Draft and pay orders
Internet banking eases the banking process and allows for NEFT and RTGS transactions to be made. Mobile Banking facilities allow instant updates on all financial activities pertaining to the account and bank in general.
GST and Current Accounts
Goods and services tax (GST) cannot be levied on a Current Account. Moreover, it is not a mandatory requirement to open a Current Account. Only accounts registered under the GST scheme require a functioning Current Account.
Banks today allow for individuals to open a Current Account online, thereby making them more accessible to a wider range of people. Offering an array of benefits, they allow account holders to carry out limitless transactions with a high limit on the value of each transaction. Individuals, companies and partnerships can each take advantage of a Current Account. Current Account holders can enhance the way in which their transactions are conducted. Should they need to, account holders can take advantage of the overdraft facility available to them. Documents needed to create such accounts include proof of identity, address and photographs of the individuals who want to open the account.
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