Basics of Current Account
A current account, also known as a financial account, is a type of bank account designated for carrying out businesses. If you or your organisations deal with a massive number of daily transactions, then you can definitely choose to open a current account.
If you compare savings and current accounts, then people holding a current account receive a lot more facilities and benefits. However, you must remember that due to the given liquidity of money in your current account, you receive no interest on your deposits. Having said that, most of the major banks offer you an overdraft (OD) facility.
What are the advantages of a current account?
As mentioned above, current accounts in India receive a lot of benefits and perks. Let’s take a look at all the advantages of the current account.
- a) You can enjoy limitless withdrawals if you open a current account.
- b) You can make the most of unlimited deposits in your current account. Provided they are made at the bank’s home branch.
- c) You get Demand drafts (DD), pay orders, and cheques for direct payments.
- d) You can experience the privilege of overdraft facilities.
- e) Once you open a current account, you get to make the most of several perks like:
1) Deposits and withdrawals can be made from anywhere.
2) Multiple location transfers.
3) Inward remittances bear no charges.
4) Uncountable withdrawals can be made by the account holder.
5) Account holders can avail of Internet services and mobile banking facilities to conduct their business smoothly.
What are the features of the current account?
- Current accounts are very popular for business purposes and for self-employed businesses.
- You only need to be 18 years to open a current account.
- Enjoy limitless daily transactions.
- Mostly there is no interest levied on the deposited amount in the current account. However, some banks have started giving interest on deposited money.
Businesses must know that a current account is not meant for saving money but for managing money for the organisation. One of the first smart moves for all businesses is selecting and opening a type of current account that best suits them. Current accounts enable a business to manage their money well so that it helps them in the future.
Can you make investments from a current account?
Yes, you can open a Trading and DEMAT account in the name of the proprietor of the current account.
When you finally select your broker, you can map your current account to your DEMAT account. Just make sure that the name is the same on both – the PAN card and the bank’s proofs.
The current account that is linked to a trading and DEMAT account must be in the name of the proprietorship.
As the bank statement consists of all the information of the proprietorship and the proprietor, it is solid enough proof to resume trading.
Please note that you won’t be able to start a Trading and DEMAT account under the same name of Sole Proprietorship. As it is a different legal entity like partnership and corporation, you cannot open a trading and DEMAT account for ‘Sole Proprietorship.’