How to open a current account for business:
When it comes to the business and organizational field, every business and company requires a banking account. Yet, these banking institutions need daily transactions and high values of transactions; in such a case, a saving account does not do justice. Thus, these companies and organizations opt for the current accounts.
A current account is one of the best banking accounts that helps the company for smooth transactions, and withdrawal and deposition do not have any limits, making it much more beneficial for the organizations and the companies. The following article will go through different aspects of the current accounts.
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What is a current account?
A current account can be considered a banking account mainly meant for a heavy and large amount of transactions. This account is created for business purposes where an immense value of transactions takes place daily. It can be opened or under a partnership with a joint venture.
The primary motive and the purpose behind the current account is that an individual running a business can transfer the funds and start the transactions smoothly without any hurdles. In a current account, there is no limit on the withdrawal as a list deposit which makes it quite beneficial. Moreover, there is the facility and provision of unlimited transactions.
How to open a current account for business? Step by Step Procedure
When opening a current account, it is important to have all the legal documentation. Some of the documents that are required to open the current account are as follows:
- If the individual is opening a current account under the partnership firm, they must have a partnership deed.
- The individual must also have a certificate of incorporation.
- The certificate of sales tax or service tax authority is quite crucial under the priority ship firm
- Moreover, an individual needs to have the address proof of the company.
- A cheque from the opening bank account.
- Identity proof along with the address proof of the partners and photographs.
These are some of the legal documents that are mandatory for opening a current account.
When it comes to the identification proof, an individual can submit the following:
- Driving license.
- Employee identity card.
Similarly, when it comes to the address proof an individual can submit the following:
- Rent agreement
- Bank statement
- Driving license.
Can a business have two current accounts?
There is a provision that a business holder can have two current accounts for their business. Moreover, there is also the provision wherein an individual can hold several current accounts if the business requires it. Under the condition of having more than one bank account, the bank needs approval from the companies and the particular documents that initiated the need for these many banking accounts.
Yet, no legal laws prohibit or forbid any individual from having more than one current account. Thus, an individual can also consider having two current accounts, one for their savings and the other for expenses.
Which bank is best for a current account for small businesses?
Top 5 Best Current Bank Account For Small Business In India
- ICICI Bank Current Account.
- HDFC Bank Current Account.
- Axis Bank Current Account.
- Kotak Mahindra Bank Current Account.
- YES, Bank Current Account.
What is the least balance required for a current account?
About the least balance required for the banking accounts, there is quite a drastic difference between the current and the savings accounts. Thus, when it comes to the current account, the least balance required is relatively high compared to the savings account. But, this least balance depends from bank to bank. Thus, certain banks allow less minimum balance, whereas certain banking institutions need a higher value of a minimum balance. And these last balances can vary around 100 times that of the least balance of a savings account.
Charges associated with the current accounts:
Certain charges, fees, and certain costs are associated with the current account. Moreover, these charges are also dependent upon bank-to-bank variation.
Some of the most common charges that are related to the current accounts are as follows:
- The demand draft charges
- The withdrawal charges
- The fund transfer charges.
- The overdraft costs, and several others.
There are a lot of banks that provide fee waivers and charge waivers over these charges, but they need to meet certain eligibility. However, these policies are predefined by certain banking institutions.
An individual can open a current account as a sole business owner or under a partnership. Either case, they need to have the full information about the current account. For opening a current account, there are certain documents that are mandatory to submit. Therefore, the individual needs to have all the documents ready themselves.
Moreover, when it comes to the least balance, the current account requires a higher value than the savings account. Current account plays an important role in helping these small business owners as well as a large-scale business owners. There is no limit on the, and an individual can do heavy transactions on daily basis without any hurdles.