All About Current Accounts: Features and Benefits | Unity Bank

All About Current Accounts: Features and Benefits | Unity Bank

Current Account

5 min read  |  4 months ago


Current Account Guide


Do you want to open new current accounts? These accounts are immensely useful for businesses and self-employed professionals in various scenarios. Here’s learning more about current accounts, their key features and benefits, and more in this guide.

What is a Current Account?

Before getting to current bank account opening procedures, you should know what these types of accounts are. These accounts are also called checking accounts in some global nations and are specific account types that mostly enable businesses and self-employed professionals to manage their financial transactions on a day-to-day basis. They are slightly different from savings accounts in terms of their operational aspects and other features.

Who Are Current Accounts For?

These are the customer types that benefit the most from current accounts:

- Businesses: Most companies, including big corporations, small and medium-sized entities, and other enterprises, should have current accounts in order to properly manage their financial transactions, get client/customer payments, pay their vendors/suppliers, and take care of operational expenditure.

- Self-employed professionals: These include doctors, lawyers, architects, chartered accountants, and consultants, who use these accounts to segregate their personal and professional transactions. This also helps them with regard to taxation and accounting.

- Partnerships and Proprietorships: Proprietors of companies or a partnership business should have current accounts in order to keep personal and professional finances separate, especially for receipts, auditing, accounting, and other purposes.

Non-profit organizations: NGOs and non-profits may also use current accounts to handle operational costs, get donations, and transparently report financial transactions

Benefits of Current Accounts

Here are some of the advantages of using current accounts for entrepreneurs, business owners, and companies.

- Current accounts enable easier movement of funds between multiple accounts, minus any transaction limits. You can transact up to unlimited amounts and numbers as per your desired frequency. Hence, there is full control and liquidity for companies/businesses in this case.

- Demarcation of business/professional and personal interests is another major advantage. Current accounts help you track your business inflows and outflows, helping you report and record transactions, plan your budgets, track expenditure, and file for taxes seamlessly. They help you keep your personal financials separate in this case.

- Current accounts do not tie you down to withdrawals or deposits only at your nearest branch. You can transact at any branch of your banking provider countrywide, while enjoying online transaction facilities such as RTGS, IMPS, and NEFT for real-time payment/receipt of funds.

- Current accounts may be customized based on several parameters such as the type of account, size of the business, your requirements, and so on. Small businesses may open accounts more tailored to them, while trusts, large corporations, or MNCs may choose accounts that have more features and advantages. The charges for these accounts also vary and you can choose the ones with lower/higher maintenance costs, depending on your specific business requirements.

- Savings accounts usually come with a single cheque book allowance for the year while you have to pay more for new cheque books. Current accounts may come with separate cheque balance/monthly cheque allowances without any additional cost, enabling you to pay your vendors freely and seamlessly.

What Are the Types of Current Accounts?

There are several kinds of current accounts offered across multiple banks and financial institutions. Some of them include the following:

- Standard Current Accounts: These are deposit accounts that do not bear interest and usually have minimum balance requirements. Along with pre-fixed monthly average balance amounts, they come with facilities like debit cards, cheque books, overdraft, SMS and internet banking, free NEFT and RTGS transactions, and so on.

- Packaged Current Accounts: These accounts have several advantages for holders, offering extra features like roadside assistance, medical support, travel insurance, and more.

- Single Column Cash Book: Simple cash/single column cash book accounts enable transactions on a daily basis, although features like overdraft are not available in these cases. These accounts are tailored for those businesses which do not maintain banking accounts and is a cash book recording daily transactions under demarcated credit and debit columns.

- Premium Current Accounts: These current accounts usually have multiple features along with higher customization options and exclusive benefits and offers for holders. It is usually provided to those customers carrying out large financial transactions.

- Foreign Currency Accounts: For those companies/people with frequent foreign currency transaction needs, these are some current accounts that may be the best solutions. They are often provided by banks and financial institutions in India.

What are the Features of Current Accounts?

Here are some of the key features of current accounts for customers. 

- Attractive MAB (Monthly Average Balance) Requirements: Banks like Unity Small Finance Bank may offer low and highly favorable monthly average balance requirements. In this case, you will need Rs. 5-10,000, depending on your location. 

- Multi-City Cheque Books: These are some other exciting features for current account holders and you can get 25 leafs for free very month at Unity Small Finance Bank as well. 

- Flexible Limits for Cash Deposition: Current accounts usually give you combined and high free cash deposition limits across both non-home and home locations. 

- Advantages with Electronic Transfers: Current accounts offer unlimited RTGS and NEFT transactions that you do through the online mode. This feature is offered by several financial institutions, including Unity Small Finance Bank

- Relationship Managers and Guidance: Current account holders will get dedicated relationship managers and skilled personnel to guide them with financial transactions and take care of all their requirements.

How to Deposit Money in Current Accounts

Cash may be deposited through several ways into current accounts. These include the following: 

- Transferring money electronically/digitally from other accounts. 

- Foreign wire transfers. 

- Deposits of money via cheques. 

- Deposits in cash at any banking branch.

What are the Various Access Types for Current Accounts?

Here is a closer look at the various access types for these accounts in terms of daily transactions.

- Home Branch: You can visit your home branch to take care of multiple banking requirements, including deposits, withdrawals, guidance, and so on. Charges may apply for deposits/withdrawals after a specific threshold.

- Cheques: You can always withdraw cash from your current account via cheque if you prefer this method.

- ATM Facilities: You can withdraw money from your current account at any of your nearest ATM machines without having to go to your branch. You can withdraw cash anytime you want, although the withdrawal limit should be noted carefully.

- Online Banking: You can always use online/digital banking to take care of various functions including payment clearance, cash transfers, viewing your balance and statements, and a lot more. You can carry out transactions anytime, without having to stick to regular banking hours and that too without having to visit your branch or standing in queues.

- Phone Banking: Many banks offer phone banking solutions, where you can execute several functions through calls. You can make payments, check your balance, or even review transactions with phone banking facilities.

Eligibility for Current Accounts

Here are the eligibility guidelines for current accounts in most cases:

- Individuals who are Indian residents

- Partnership firms

- Hindu Undivided Families (HUFs)

- Sole Proprietorship firms

- Limited Liability Partnerships

- One Person Companies

Public and Private Limited Companies

Government Establishment/Undertaking

Association of Persons

Associations/Cooperative Societies/Clubs/Trusts

Any other entity with the eligibility to open a current account

Fees and Charges for Current Accounts

Here are some of the applicable fees and charges for current accounts.

- Charges are sometimes levied by banks for non-maintenance of the average MAB (monthly average balance) or minimum account balance. Check this amount (usually between Rs. 5-10,000 each month) and maintain it to avoid paying these charges.

Charges are also nominally applicable for several facilities including duplicate account statement requests, demand draft remittances, pay orders, cancellation of pay orders, RTGS and NEFT transactions not done through net banking, and so on.

Banks may also have charges for bulk transactions after you cross the free limit for the month, based on the account type and overall package.

You may have to pay nominal amounts for outstation cheques at your branch or for cheque collection at the locations of the correspondent bank. There may also be penalties for bounced cheques in case of insufficient funds.

Some miscellaneous charges on current accounts may include costs of balance configuration certificates, balance enquiries (non-digital), cheque status, identity verification, interest certificates, TIN/PIN regeneration, account closure, etc.


How to Open Current Accounts

It is easy to open new current accounts, provided you follow a few basic steps. These include the following: 

- Select your bank: Compare multiple banks on the basis of their current account offerings, features, services on offer, charges/fees, nearest branches, and so on.

- Set up an appointment: Book an appointment with bank personnel for opening a current account at your home branch. Some banks may give you the option to open your account online, although in-person verification may still be necessary thereafter.

- Fill up the application form: You will receive this form from the bank and will have to provide your personal and business details as required by the bank.

- Furnish all necessary documents: You will have to provide specific documents in order to open your current account. These may include the following:
     a. Proof of registration of your business: This can be in the form of a certificate of             incorporation, business license, or partnership deed.

     b. Proof of your address: You may provide utility bills or bank statements as proof of your address.

     c. PAN card of the company/business is also necessary in many cases.

     d. Personal identification documents may be required, such as your driving license, passport, or any other applicable Government identity card/document.

     e. You will also have to provide your passport-sized photographs.

- Put in the initial deposit: Make your first deposit as per the policies of the bank and the amount may vary from one financial institution to another.

- Activation of your account: Once the bank receives your current account application and reviews/verifies the same, you will get the official notification about the activation of your account. You will also get your debit card, online banking details, cheque book, and other deliverables associated with the current account likewise.

What are the Current Account Opening Requirements?

There may be a few requirements for opening current accounts at banks or financial institutions.

- Type of business: You should have a business that is registered and it can be an LLP, partnership firm, proprietorship, and even a public/private limited company.

- Your address and identity proof: You will have to furnish proof of your address and identity through requisite Government IDs and other applicable documents.

- Documents of your business: You will need an incorporation certificate for your business or your business license. Partnership deeds may also be accepted by banks and financial institutions in this case.

- Deposit: You should be ready to make an initial deposit into your current account. The minimum amount may vary from one bank to another and you should check these aspects carefully before applying.
As can be seen, current accounts are immensely useful for small and medium businesses, self-employed professionals, entrepreneurs, NGOs, and trusts, among other entities. They not only enable better demarcation and management of professional/business finances, but also aid swift financial tracking, reporting, and accounting, along with tax filing. At the same time, current accounts also offer numerous benefits for customers in terms of their services and features. Before opening a current account however, it is important to keep the above-mentioned aspects in mind.


About Unity Small Finance Bank

Unity Small Finance Bank is committed to making banking simpler and more accessible for everyone. Our services include Savings AccountNRI accountCurrent AccountFixed 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.