Eligibility to Open a Current Account: Guidelines Explained
5 min read | 5 months ago
Who Can Open a Current Account- Checking Eligibility Guidelines and More
In the present age, almost everything has embraced the digitalization wave, particularly both small and large business enterprises. Therefore, having a current account has become mandatory, particularly for startup and partnership businesses, so as to be not left behind in the current digital era. A current account is a specific type of bank account which allows an individuals, businesses or an organizations to conduct various financial activities such as digital transactions and withdrawing cash.
In this blog, we will discuss who is able to open a current account and some of the other requirements to consider, along with how to open current accounts and their different types.
Eligibility Criteria for Opening a Current Account
If you are wondering whether you can open a new current account or not, the answer is simple. All you need to do is meet certain eligibility criteria. The following are some of the key aspects to remember.
- Minimum Age Requirement: To open a current account in India, you need to be at least 18 years old.
- Residential Status: You need to be a resident of India to open a current account. In some cases, non-resident Indians (NRIs) may also be eligible to open a current account.
- Identification Documents Required: To open a current account, you need to submit certain identification documents such as your PAN card, Aadhar card, passport, driving license, or voter ID card.
- Business Documents: For proprietorship or partnership current accounts, documents like the registration certificate or CST/GST/VAT certificate are essential.
Additional Factors to Consider
When it comes to opening a current account, there are a few extra things to keep in mind besides just meeting the eligibility requirements. Here are some of them.
1. Minimum AMB
2. Purpose of account
3. Fees and Charges
4. Overdraft Facility
Let us look at these aspects in more detail below.
- Minimum Average Monthly Balance (AMB)
Most banks require you to maintain a minimum average monthly balance in your current account. If you fail to maintain the minimum balance, you may be charged a penalty.
- Purpose of the Account
Before opening a current account, you need to decide on the purpose of the account. For example, if you're a business owner, you may need a current account to receive payments from customers and make payments to suppliers.
- NEFT and RTGS Fees and Charges Associated with the Account
You need to check the fees and charges associated with the current account, especially for NEFT and RTGS transactions. Most banks may offer free NEFT and RTGS transactions up to a certain limit. However, some banks like Unity Small Finance Bank offers unlimited free NEFT and RTGS transfers.
- Overdraft Facilities
Some banks may offer overdraft facilities on current accounts, which can be useful for businesses that need short-term credit. However, overdraft facilities may come with certain conditions and fees.
Types of Current Accounts Available
There are different types of current accounts available, depending on your requirements. The following are some of the types of current accounts available.
- Regular Current Accounts
These are standard current accounts that are suitable for individuals and businesses with moderate transaction volumes.
- Proprietorship Current Accounts
These are current accounts that are specifically designed for sole proprietorship businesses. Proprietorship current accounts may come with additional benefits such as free NEFT and RTGS transactions and lower minimum balance requirements.
- Startup Business Current Accounts
These are current accounts that are designed for startups and small businesses. They may come with additional benefits such as waived account opening charges, free NEFT and RTGS transactions, and lower minimum balance requirements.
Now you have a better idea of the types of current accounts that are available. But, how can you open these accounts? Here is a quick look at the methods of opening current accounts.
How to Open a Current Account
To apply for a current account, you can either apply online or in-person. The following are the steps to apply for a current account.
- Online Applications: Most banks offer online applications for current accounts. You need to visit the bank's website, fill in the application form, and upload the required documents.
- In-Person Applications: You can also visit the nearest bank branch and apply for a current account in-person. You need to fill in the application form and submit the required documents.
The processing time for current account applications may vary from bank to bank. In most cases, it takes around 3-5 working days to open a current account. However, digital current account may take much shorter times.
Conclusion
Opening a current account is essential for businesses and startups, but it's important to understand the eligibility criteria and account opening process beforehand. You should also compare various types of current accounts to find the one that best suits your requirements. While this process may take a little time and energy on your part, it will always be worth your while.
FAQs
1. What are the benefits of a current account?
A current account offers benefits such as overdraft facility, online banking, and easy access to funds for business transactions.
2. Are there any minimum balance requirements for a current account?
Yes, most banks have a minimum balance requirement that varies depending on the type of account.
3. Who is eligible to open a current account?
Individuals, businesses, companies, and organisations can open a current 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.
