Choosing the Right Current Account: Key Features to Consider
5 min read | 4 months ago
Choosing the Right Current Account- Key Features That You Should Look For
Thinking about opening a new current account and feeling lost? Well, it is hardly surprising that you might be confused with the abundance of options you’re being bombarded with. However, that’s what we’re here for! Our blog will explain to you everything you need to know about a current account – definition, types, how to open one, and, the most vital aspect, i.e. a checklist of three essential features that your perfect current account should have. So, let's dive in!
What are Current Accounts
Before delving into details, let us briefly introduce you to what current accounts are. A current account, ideal for businesses of all sizes, is crafted to streamline operations and fuel expansion. They are bank accounts intended for regular transactions, which can be effective for businesses quickly needing to transfer money. However, there are those for individuals as well. With an individual current account, you can deposit and withdraw funds, write checks, and make electronic transfers. In other words, if you are a business owner or just have lots of transactions to fulfill within your personal goals, a current account will be the best choice for you!
Types of Current Accounts
When it comes to current accounts, there are different types to suit different needs. Let's take a look at the three main types.
First up, there are Individual Current Accounts. These accounts are great if you need to make a lot of transactions. They usually offer higher transaction limits and lower fees, which makes them a popular choice for people who need to make frequent transactions.
Then there are Proprietorship Current Accounts, which are designed for sole proprietors who run small businesses. These accounts are linked to the owner's personal account and are used to keep business transactions separate from personal transactions.
Lastly, many banks offer Startup Current Accounts, which are ideal for startups and small businesses. Normally, fees and minimum balance for these accounts are lower than for others, which is very beneficial for startups. This type of account is intended to meet all the needs of a small business and help keep track of all finances.
So, depending on your needs, you can choose to open the type of current account that suits you best. But how exactly can you open a current account? Here’s how you can open your choice of current account.
How to Open a Current Account?
It may seem to you that the current bank account opening process is quite complicated as the document requirements is much different from savings accounts. So, here’s explaining it in an easy way and straightforward way.
You'll need to provide some basic information about yourself or your business, such as your name, address, and contact details in the first stage of account opening. You'll also need to provide some documentation, such as proof of identity, address, and business registration (if applicable).
Once you've provided all the necessary information and documentation, the bank will review your application and may conduct a credit check before approving your account. Once your account is approved, you'll be able to start using it to make transactions.
Even though the process of opening a current account is nearly the same for banks like Unity Small Finance Bank or other public banks, no two current accounts are the same. There are certain features offered by current accounts, which make them a better choice for you. So, let’s take a look at what these features are.
3 Key Features of Current Accounts
When choosing a current account, there are three key features that you should look for: unlimited NEFT and RTGS transfers, low AMB requirements, and digital banking services.
- Unlimited NEFT and RTGS transfers: NEFT (National Electronic Funds Transfer) and RTGS (Real-Time Gross Settlement) are two electronic fund transfer systems that are used in India. Current accounts should offer unlimited NEFT and RTGS transfers, as these are commonly used by businesses to make payments.
- Low AMB requirements: AMB (Average Monthly Balance) is the average balance that you need to maintain in your account every month. Current accounts should have low AMB requirements, as businesses often have fluctuating cash flows and may not be able to maintain a high balance every month.
- Digital Banking Services: Digital banking services, such as mobile banking and internet banking, are becoming increasingly important in today's digital age. Current accounts should offer these services, as they make it easier for businesses to manage their accounts and make transactions on the go.
Conclusion
To conclude, choosing the right current account is important for businesses and individuals who need to make frequent transactions. When choosing a current account, it's important to look for features such as unlimited NEFT and RTGS transfers, low AMB requirements, and digital banking services. By choosing an account that offers these features, you'll be able to manage your transactions more efficiently and save money on fees and charges. Moreover, with the right current account, you can streamline your business operations and focus on growing your business.
FAQs
1. What is the difference between a savings account and a current account?
A current account is designed for businesses and offers unlimited transactions, whereas savings accounts are meant for personal use.
2. Can I open a current account online?
Yes, most banks offer online account opening facilities that make it easy and convenient to open a current account.
3. Do all current accounts come with digital banking services?
No, not all traditional current accounts come with digital banking services. It's important to check with the bank before opening an account.
About Unity Small Finance Bank
Unity Small Finance Bank is committed to making banking simpler and more accessible for everyone. Our services include Savings Account, NRI account, Current Account, Fixed Deposits, and Personal Loans offering flexible tenures and attractive interest rates. We also offer financing options like MSME Loans and Microfinance to support businesses and underserved communities. Learn more about Unity Small Finance Bank here.