How to find a current account that is a perfect match for your needs?
Whether you have a small enterprise or a big firm, opening a current account is a must to conduct seamless business transactions. Small business owners often think they can manage without a current account and use their savings account for all their business-linked transactions. However, later they tend to realise that having a current account is a must to streamline their withdrawals, deposits, and various other business transactions.
If you are one of those looking to open a current account, ensure to keep these important checkpoints in mind –
- Check the minimum balance requirement
Generally, you must maintain a minimum average balance in your current account. So, before you zero in on any account type, ensure to check the current account’s minimum balance requirement. Usually, a current account has a higher minimum balance requirement than a savings bank account owing to the provision of higher benefits. A few important benefits are free demand draft, free cheque collection through speed clearing, free cheque payments as well as collection, free multi cheque books every month, availability of banking services at home and office i.e., free cash and cheque pick-up and delivery, free phone banking, SMS banking and net banking solutions, free NEFT and RTGS services at the bank branches or through net banking, etc. Note that, you must select an account that provides optimal benefits and features at a minimum average balance requirement.
- Overdraft facility
An overdraft facility is one of the prudent features of a current account
. So, you must ensure to check if the financial institution is offering this option with higher limit and at the lowest rate of interest. A higher overdraft limit is vital to opt for as it assists to maintain business stability in the occasion of inadequate working capital or any delay in receiving the payment. An overdraft option is a type of extended facility, which offers an amount over your current account balance. This facility even allows you to pay your pending dues through pay orders or cheques.
Note that opting for a higher overdraft limit on your current account will not result in additional cost because the interest constituent on this option is just charged on the amount you use and not on the entire sanctioned overdraft limit. You can repay the availed amount easily in the form of EMIs depending on your convenience and cash inflow.
- Charges and fees
Ensure to assess the distinct fees and charges on the current account. Remember that such fees might vary from one account to another. You can simply find such fees and charges on the bank’s most important terms and conditions (MITC) or general schedule of features and charges (GSFC) section. To fetch both documents, you must visit the bank’s official website. Ensure to review the fees of those current account features that you would often use like RTGS, demand draft, IMPS, NEFT, on-call request, cheque book, cash deposit limit, etc. Remember that all such services usually are available for free for up to a specific limit, after which charges may be applicable. Thus, being aware of the fees of such features beforehand will allow you to stay prepared for any occasion when you may require exceeding the available limit. Make sure to choose the account accruing the lowest charges and providing optimal benefits.
Ending note
Thus, ensure to factor in the above-mentioned three parameters to select a prudent current account as per your business requirement. Once, you have selected the account type and bank where you want to open a current account, ensure to keep specific documents handy for a quick account opening process. Crucial documents required for opening a current account are proof of business like the certificate or license issued by municipal authorities as per the Shop & Establishment Act, GST/VAT/CST certificate, TAN allotment letter issued by NSDL, etc., your address and identity proof like passport, voter ID, driving license, PAN card, etc. and a self-declaration on bank’s prescribed format. You must keep such documents handy for both whether it a regular or an instant current account opening process.
