So we are going to understand the current account in simple language. Before understanding it, you need to understand deposits. So there are two types of deposits. First, there is the time or term deposit. People keep money in this kind of deposit, and then they will keep this money for some time.Some examples of term deposits are FD (fixed deposit) and RD (recurring deposit). But SIP (Systematic Investment Plan) is not a deposit; it is a third-party product for banks.
The second type of deposit is known as a demand deposit. In this kind of deposit, a customer can come and ask for their money at any instant or withdraw money by various methods, either online or offline, from the branch using online transactions or from an ATM, etc.Some examples of demand deposits are current accounts, savings accounts, task account, etc. Some examples of demand deposits are current accounts, savings accounts, task accounts, etc. Current account, specially designed for business purposes. Savings accounts are designed to save money, and task accounts are designed for trust associations, societies, clubs, etc.
In short, we can say that a current account is a kind of demand deposit which is useful for businesses
Key features of a Current Account
. It has some special services which are used for businesses, for example, unlimited transactions.
.I do not provide any kind of interest as per RBI guidelines, but some banks have identified some loopholes, and they can provide interest on some part of the current account deposit in the current account using the sweep-in and sweep-out facility.
.Most of the banks provide free-of-charge online transactions up to some limit when customers use net banking for online transactions, like NEFT, RTGS, etc., but it is chargeable when done from the branch.
.There is no limit for daily transactions for a current account when all transactions are done using online or cheque or DD or PO.
.Up to some limit, there is a facility for free cash deposit; after that limit, cash deposit is chargeable. This service varies from bank to bank, reason to region and type of current account.
.For businesses involved in export or import or both, there is a different kind of current account; it has special services for EXIM businesses.
Types of Current Account
There are eight types of current accounts depending on the constitution of the business.
Below is the list of all eight types of current accounts..
- individual current account
- proprietorship current account
- Hindu undivided family current account
- registered partnership current account
- limited liability partnership current account
- Private Limited current account
- OPC Private Limited current account
- public limited current account
Please remember that what kind of document you read depends upon the constitution of the business, not the size of the business. The business may be small or big, but if the constitution is the same, then both businesses will submit the same document for opening a current account.
Current Account Opening documents required
For individual
This kind of current account is generally opened by practising professionals like practising CAs, practising CSs, practising doctors, practising lawyers, practising advocates, etc.
- Practising certificate
- PAN card
- address proof
- Account opening cheque from savings account
For sole proprietor
If you are a business owner and have registered your business under sole proprietorship, then you need this type of current account. Below is the list of documents required for opening a current account for a sole proprietorship:
GST certificate of three pages
PAN card of proprietor
address proof of proprietor
account opening cheque from savings account of proprietor
latest passport-size photo of proprietor
(Incase of online opening, a hard copy of the photo is not required.)
If you don’t have GST registration, then you can also submit a trade licence or shop establishment licence, but GST registration is highly recommended.
unregistered partnership current account
If you are a business owner and you have registered your business as an unregistered partnership, then you have to open a registered partnership current account. Below are the documents required to open an unregistered partnership current account.
partnership deed
PAN card of the firm
address proof of the firm
PAN card of all partners
address of all partners
Latest photo of all partners
account opening cheque from savings account of any partner who will be authorised signatory for the current bank account as well.
This kind of current account is hardest to open; hence, it is recommended to open this current account offline and have patience because it will take more time to open than any other current account.
Limited liability partnership
If you are a business owner and you registered your business as a limited liability partnership,
then you need this type of account to open a limited liability partnership current account.
Below is the list of documents required to open an LLP current account.
Certificate of incorporation
LLP deed
PAN card of LLP
address proof of LLP
PAN card of designated partners
address proof of designated partners
latest photo of designated partners
An account-opening cheque from the savings account of a designated partner will also be an authorised signatory or one of the authorised signatories for the current account.
Private Limited
If you are a business owner and you have registered your business as private limited, then you will open a private limited current account. Below is the list of documents required to open a private limited current account.
certificate of incorporation
company PAN card
MOA
AOA
PAN card of director
address proof of directors
latest photo of directors
account opening cheque from the savings account of a director
(OPC) Private Limited
If you are a business owner and you have registered your business as an (OPC) private limited, then you will open a (OPC) private limited current account. Below is the list of documents required to open a private limited current account.
certificate of incorporation
company PAN card
MOA
AOA
Documents of Nomination
PAN card of director
address proof of director
latest photo of directors
account opening cheque from the savings account of the director
Public Limited Current Account
If you are a business owner and you have registered your business as a public limited company, then you will open a public limited current account. Below is the list of documents required to open a public limited current account.
certificate of incorporation
certificate of commencement of business
company PAN card
MOA
AOA
PAN card of directors
address proof of directors
latest photo of directors
account opening cheque from the savings account of a director
*Please remember that it is Mandatory to link PAN and Aadhaar for any type of current Account
Leave a Reply