Current Account- Meanings, Types & Features

A current account is one of the most basic and essential financial products offered by the banks. Here are some of the major features of current accounts:

• Unlike savings accounts, which often have limitations on the number of transactions you can make, current accounts generally offer unlimited transactions. This makes them suitable for frequent and everyday banking activities.
• A current account also enables account holders to make payments to others by issuing a cheque.
• Current account holders are usually provided with a debit card linked to their account. This card can be used for ATM withdrawals and for making purchases in stores or online, provided the account has sufficient funds.
• Many current accounts offer an overdraft facility, allowing account holders to withdraw more money than they have in their accounts up to a certain limit. Overdrafts are generally subject to interest charges.
• It also offers online banking services, enabling account holders to manage their finances, check balances, and conduct transactions through internet banking or mobile apps.
• Current accounts facilitate the setup of auto-debits for regular payments such as utility bills, rent, and loan repayments.

There are different types of current accounts offered by the banks. Here are some of the common types of current accounts:

• Basic Current Account: This is a standard current account or checking account that allows you to deposit and withdraw money. It also provides debit cards for all its customers.
• Savings Linked Current Account: This type of account links your current account with a savings account. Any excess funds in your current account are automatically transferred to the linked savings account, helping you earn interest on those funds.
• Business Current Account: It is specifically for businesses. This account type often offers features like overdraft facilities, business-specific services, and the ability to make regular transactions.
• Joint Current Account: This account is shared by two or more individuals and is often used by couples or business partners to manage their finances together.
• Student Current Account: This type of account is only for students and offers benefits like interest-free overdrafts and discounts on certain products and services.
• Foreign Currency Current Account: This type of account is useful for those who deal in multiple currencies. It allows you to hold and transact in various foreign currencies.
• Salary or Payroll Current Account: This is used by employers to deposit employees' salaries directly into their accounts, often with added benefits like lower fees or overdraft options.

Every current account has a minimum balance requirement that must be maintained by the account holders. This minimum amount varies from bank to bank, depending on the type of current account.

Given below are the current account minimum balance requirements for the top banks in India:

One can use any of the following methods for depositing cash in their current account:

• Through cheque deposits
• By depositing cash at any bank branch
• Through electronic transfer
• Through wire transfer for international transaction

Documents Required to Open a Current Account

One needs to submit the following documents while opening a current account:

• PAN card
• Address proof
• Certificate of incorporation and memorandum of association
• Partnership agreement in case of partnership firms
• ID and residence proof of all partners
• A colour photograph of the applicant(s)
• Cheque from existing savings account for account opening
• Companies should provide the address of communication