8 Key Factors to Look at Before Opening a Current Account

4 MinsMar 22, 2021

Kavya Sharma, 25, has started her own fashion business and wants to open a Current Account for her business transactions. So far, she has used only a savings account for all her banking transactions and is not sure of what features to look for in a Current Account. Let’s help her out by listing some parameters a Current Account should have.

current account

Factors to Consider Before Opening a Current Account

1.  Transaction fees: A Current Account allows unlimited transactions. However, banks charge a fee when the number of transactions crosses a pre-set limit. The lower the fee, the better it is for Kavya.

2.  Minimum balance: Most Current Accounts require account holders to maintain a minimum balance. As Kavya is just starting, it would be wiser for her to have a smaller minimum balance that needs to be maintained.

3.  Premium services: Some banks offer services like pick-up and deposit of cash, access to after-hours banking, credit cards, free pay orders, demand orders, Cheque Book, Digital payments – NEFT, RTGS, IMPS and Digital Banking services like Retail Internet Banking/Corporate Internet Banking and Mobile Banking. These services come at a cost. Kavya needs to figure out whether she needs such services and the costs attached to them.

4.  Overdraft limit: Most banks offer Current Account holders Cash Credit and or Overdraft facilities after they are convinced of the customer's credibility. In case Kavya faces a cash crunch in her business, an OD can help her tide over it. Hence, she should choose a bank that can provide her with the best rates and can offer her the OD facility as soon as possible.

5.  Core services: She should also ensure that the bank she chooses is extremely reliable when it comes to core services like internet banking, Mobile Banking, Cash Management Services, IT Services, ERP Services, multi-location cash deposits and fund transfers, wire transfers, bill payment services and debit card access.

[Also Read: A new age digital savings account can change the way you bank]

6.  Interest rates: While a Current Account doesn't earn any interest, Kavya can transfer surplus funds to fixed deposits. She needs to choose a bank with the best rates that she can park her extra funds in.

7.  Size of the Bank: A bank with a larger bank network may be in a better position to offer services in more number of locations. It would also have a larger ATM network that can be useful in case Kavya needs to access cash.

8.  Digital services: The bank should also offer Digital Current Account services online. This will ensure that Kavya can open her account instantly and with minimal documentation. She would also be able to carry out all subsequent transactions in the comfort of her home or office, without having to visit the branch.

Once Kavya has chosen a bank, all she has to do is collect all the documents she needs -- ID proof, address proof, PAN Card, business registration documents (depending on the type of the business entity) either scanned if opening it online or in hard copy if she's doing it in person, and get ready to fill out her application and make her initial deposit, if required.

Axis Bank offers a range of Current Accounts designed to meet all its business customers' requirements – from individuals, sole proprietors, Public & Private Ltd. Companies, Trusts, Societies and Associations etc.

Disclaimer: The Source, a Mumbai-based content creation and curation firm, has authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.