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Current Account- Meaning, Documents required, Benefits, Types etc

Updated on: 10 Aug, 2023 03:44 PM

Current account is non personal bank account. It is a type of deposit bank account commonly used by companies, public enterprises, and businessmen. This account is normally associated with higher number of transactions with the bank. These transactions include deposits, withdrawals and transfer of funds from one account to another of the same bank or another bank. These accounts are also called Demand Deposit Account.

You can open a current account in almost all commercial banks. These accounts generally have large transactions on a daily basis hence, there is no limit to the number of transactions allowed. Further, because of the continuous transactions, you will not earn any interest on this account.


  • It allows you to make as many transactions as you want.
  • There is no limit on the amount that can be deposited in your current account
  • You can deposit money to your current account at any other branch after paying a small fee.
  • Demand drafts and cheques can be issued through your current account for making direct payments
  • If you are a current account holder you can also avail overdraft (OD) facility
  • There are many benefits that businesses enjoy on a current account like free inward remittances, withdrawals and deposits to be done from any location, multi-location transfer, etc. at no extra cost.
  • There is no limit on the amount that can be withdrawn from the account by businessmen, which is subject to banking cash transaction tax, if any.
  • It is very useful for businessmen who need regular transactions to run their business
  • It also helps the creditor in ensuring the credit worthiness of the account holder (in case he can have access to account information)
  • Also have additional facilities like net banking and mobile banking to make it easier for you to access your account.

Some Drawbacks of current accounts

Evrythings comes with a cost so does current accounts. Some of the drawbacks associated with current accounts are

  • There is no or very low interest on the deposits of current account
  • Services are offered at additional costs by most package accounts
  • Associated with higher fees due to corporate business transactions
  • Limit on the withdrawal amount in one day

Required monthly average balance

The commercial banks have thresholds set for opening up of current accounts on the basis of Monthly Average Balance to be maintained. On the basis of these limits the various facilities associated with the account differ. Given below is the list of some of the banks with their prescribed MAB amounts.

Bank Monthly Average Balance (MAB) Free deposit limits
HDFC Bank Rs.75,000 10 times the MAB
ICICI Bank Rs.25,000 12 times the MAB
Axis Bank Rs.10,000 Up to Rs.2 lakhs
IndusInd Bank Rs.10,000 Up to Rs.2 lakhs
Canara Bank Rs.1 lakh (quarterly) Up to Rs.5 lakhs per day
Yes Bank Rs.1 lakh (quarterly) Up to 10 times of AMB
Punjab National Bank Rs.1 lakh (quarterly) Up to Rs.2 lakhs per day

Types of current accounts

The various types of current accounts are

  • Standard Current account
    This is a current account which does not earn any interest and a minimum average balance is required to be maintained. Facilities like debit cards, overdraft, internet banking, mobile banking, transactions through RTGS and NEFT, etc.
  • Packaged Current account
    It provides additional features like travel insurance, roadside assistance and medical support etc
  • Single column cash book
    It does not provide any facilities rather it just maintains a record of the transactions taking place daily.
  • Premium Current account-
    It provides high customized features to the account holders. Generally preferred by account holders with higher transaction amount.
  • Foreign currency accounts-
    Best suited for customers who need frequent transactions in foreign currency.

Different methods of depositing cash in current account

Cash in current account can be deposited in any of the following manners

  • At the branch
  • Deposits through cheques
  • Electronic transfer
  • Wire transfer from outside India

Documents required for opening a current account

The documents required while making an account opening application for current account to any of the commercial banks includes

  • PAN card
  • Proof of address
  • Companies and institutes are required to submit a certificate of incorporation and memorandum of association
  • In case of partnership firms they are required to submit partnership agreement
  • Passport size photographs
  • A cheque from existing savings account

Different types of Access provided by current account

  • Home Branch-
    You can deposit and withdraw cash from your current account at your home branch
  • Cheques-
    You can make your transactions through cheques
  • ATMs-
    It is not mandatory to visit your home branch for cash saving bank accounts in this case too you can make withdrawals or deposit cash using your nearest ATM machine
  • Online banking-
    The facility of online banking is also available in case of current accounts. It is the most convenient form of banking where you can view your statements, transfer money, clear payments at any point of time and location.

CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.