Key Essentials to Note When Opening a Current Account

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17 AUGUST, 2023

A Current Account has become a necessity in business setup. With transactions moving to a cashless setup, a Current Account has become a must-have for business owners. From offering an array of benefits like easy access to funds to overdraft facilities, Current Accounts provide convenient solutions to professionals and business houses.

As beneficial as it is to operate a Current Account, opening a Current Account can seem like a daunting task at first. First-time users are usually inexperienced when it comes to asking the right questions before opening a new Current Account. However, with the right information, the seemingly tedious process of opening a Current Account becomes simple and hassle-free.

Here is a list of some of the essential aspects that one must note when opening a Current Account.

Service Offering

Customers must take note of the frills and facilities attached to a Current Account. These additional features are important offerings as they ease your business operations. Services like doorstep banking, unsecured overdraft facility, a dedicated relationship manager, cash management services, free demand draft facility, balance alerts, etc. help in creating a hassle-free and seamless banking experience. Accepting and making payments becomes easier with a Current Account. Exclusive features such as POS facility, QR-based transactions and digital payments are offered to Current Account holders.

Multiple Touchpoints

The current generation of customers is thriving on web-based transactions, which have extended into the banking sector in the form of Net Banking and Mobile Banking. It is essential for business owners operating in today’s digital age to ensure if the bank has an online presence (website, application, etc.) and be satisfied with the user experience of the online applications.
Another overlooked factor these days is the physical point of presence of a bank. There may be certain instances or requirements for which visiting a bank may be more convenient or useful. It is usually advisable to opt for a bank, that has multiple touchpoints and branches spread across the city.

Service Charges or Fees

Some banks may charge their customers for ancillary services such as SMS alerts, duplicate ATM card/PIN number and additional cheque-leafs beyond the minimum free quota. It is good to be well aware of these charges at the time of opening a Current Account. Having said that, a more transparent bank that is upfront about marginally high charges is better than a bank one that appears low-cost but would keep many costs hidden.

Additional Read: Is your business eligible for ActivMoney current account? A view into its features and benefits

Minimum Cash Balance

Typically, banks offer a diverse range of Current Account variants which have varied minimum balance requirements. Also, each bank has a different criterion for determining whether the minimum balance requirements are met. Certain banks monitor the average monthly balance (AMB) while others require a prescribed average quarterly balance (AQB) to be met.
Since the AQB measure gives the account-holder more time to fulfil the average requirement, it is beneficial for customers to opt for Current Accounts with an AQB limit.
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It is important to find a Current Account that suits your business needs.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.

Essentials to note when opening a Current Account

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Essentials to note when
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