Best Bank for Current Account for Small Business in India

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08 FEBRUARY, 2024

For efficient business transactions, having a dedicated Current Account is indispensable, whether you operate a small enterprise or a large organisation. While some may initially believe their Savings Account can handle all banking needs, the reality becomes clear – a specialised Current Account is crucial for smooth business operations and growth.

Our comparative analysis delves into various Kotak Current Accounts, helping in selecting the best Current Account in India for your business needs. Learn about the hassle-free account opening process and essential documents that make Kotak the best bank for current account solutions in India.

List of Top Current Bank Accounts for Small Businesses in India offered By Kotak Mahindra Bank

Astra 15 Current Account

Astra 15 Current Account offers high waivers on deposits and withdrawal fees, free NEFT, RTGS and cheque book facilities, waivers on cheque deposit fees and a wide range of features crucial for the growth of big enterprises.

It is one of the best Current Accounts and the major features include the provision of a business platinum debit card with a daily transaction limit of Rs 3 lakh and a daily withdrawal limit of Rs 1.5 lakh, Kotak ActivMoney facility to automatically convert Current Account balance into term deposits to earn FD-like interest of 7% p.a., access to higher unsecured overdraft options of up to Rs 15 lakh for short-term business needs, and free unlimited demand drafts.

Astra 05 Current Account

Astra 05 Current Account offers a wide range of benefits best matched to big businesses' needs, including waivers on withdrawal charges and cash deposits, cheque returns and deposits, and free money transfer facilities – NEFT, RTGS and cheque book.

Other important features include free outstation cheque collection, unlimited free demand drafts, free cheque collection via speed clearing, free alerts through SMS and email, cash management service, provision of Kotak ActivMoney option and overdraft facility.

ActivMoney Current Account

This business Current Account has unique features and benefits that assist you in generating interest on the idle funds in your Current Account. Balance over a fixed, predetermined limit is automatically transferred into a Fixed Deposit earning you FD-like interest of 7% p.a. The best part is that the fund that is transferred to a deposit account is highly liquid i.e., in times of any financial urgency, you can liquidate the parked Fixed Deposit amount without paying any penalty for the premature withdrawal.

Besides this benefit, the account also offers a flexible cash deposit option, free cash withdrawals at the home branch, free cash withdrawals of up to Rs. 5 lakh per day from non-home branch, free unlimited demand drafts, and a waiver on outward cheque returns.

Additional Read: Do current accounts have a minimum balance requirement?

Ace Current Account

Ace Current Account aims to efficiently manage various banking needs of big businesses without maintaining a high quarterly balance. Like other Kotak Current Accounts, Ace account also permits a high daily purchase and withdrawal limit, provides Kotak ActivMoney facility, unsecured credit access through overdraft facility, and free demand drafts.

Elite Current Account

While Elite Current Account is a premier account, it allows a comfortable average quarterly balance requirement of just Rs 1. lakh, and a wide host of features like free demand drafts, overdraft option, waivers on withdrawals and cash deposit, free RTGS and NEFT facility through net banking and at a branch, better forex rates and trade services, cash management services, POS (point of sale) solutions, etc.

Startup Premium account

A Startup Premium Current Account is bundled with offerings to enhance the growth of a startup by providing benefits like non-maintenance charge waiver, preferential pricing on import and export services, and provision of safe and bulk transactions. It is one of the best Current Accounts for proprietorship.

Other important features include free NEFT/RTGS transactions through net banking or branches, free cash withdrawal of up to Rs. 1 lakh per day at non-home branch locations, free cheque collection and payment pan-India, and free outward cheque returns.

How to Choose the Right Kotak Current Account

Here’s how you can choose the suitable Current Account with the Kotak, the best bank for current account for small business in india:

Determine Business Needs:

Identify your specific business requirements and transaction volume. Consider daily transactions, online banking needs, and average balance requirements.

Account Types:

Explore Kotak's range of Current Account options. Choose an account type that aligns with your business size and needs.

Fees and Charges:

Compare fees for transactions, ATM usage, and monthly maintenance. Look for an account with transparent and reasonable charges.

Online Banking Features:

Evaluate Kotak's online banking platform. Ensure it offers convenient features like fund transfers, bill payments, and real-time account monitoring.

Branch and ATM Accessibility:

Check the availability of Kotak branches and ATMs in your business locality.

Steps to open a Kotak Current Account

1. Check your Eligibility Criteria

Examine the eligibility criteria for various Current Account types tailored for different business entities and stages.

2. Gather your Application Documents

The required documents vary based on your business type and structure, although the common documents needed are Aadhaar card, PAN card, ITR documents, GST certificate, utility bills, etc.

3. Complete the Application Process

Initiate the application process by contacting branch representatives or visiting a nearby branch. You will be notified upon approval, and essential documents, including your account number, will be issued.

4. Make your Initial Deposit

Activate your new Current Account by making the initial deposit. Your account becomes operational after this step, to commence business transactions.

5. Receive Your Account Kit

Once activated, receive your Account Kit, which includes essential tools like a cheque book, debit card, ATM card, and online banking details.

Why Choosing the Best Bank Current Account Matters

Choosing the best Current Account bank for business becomes essential when using it for your business transactions. Here’s how a Current Account helps you in daily activities and offer features of being the best Current Account for business in India :

Convenient Transactions:

Cheque books, debit cards, and online banking ensure easy payments, cash withdrawals, and fund transfers.

Flexibility in Access:

It enables individuals to manage finances 24/7, ensuring financial control and security.

Overdraft Facility:

An available overdraft for withdrawing funds beyond the account balance is a significant advantage.

Streamlined Bill Payments:

It simplifies bill payments through direct debits and standing orders.

Business Advantages:

It enables businesses to receive payments, issue checks for vendor payments, and establish a professional banking relationship for financial growth.

Factors to consider when choosing a Current Account for small businesses

There are certain factors that are important in the decision-making process in the quest for the best bank for a Current Account for small businesses in India. Understanding these factors ensures that small business owners make well-informed choices for their financial needs.

1. Accessibility:

Seamless business operations depend majorly on accessibility. Always evaluate the convenience of the bank's branch and ATM network in your vicinity. Also, assess the availability of user-friendly online and mobile banking for efficient account management.

2. Overdraft Limits:

Overdraft facilities provide crucial financial safety nets for small businesses. Understand the terms and conditions surrounding offered overdraft limits. Opt for a bank like Kotak Mahindra Bank that provides flexible and adequate overdraft options to cover unforeseen expenses and navigate cash flow fluctuations.

3. Monthly Minimum Balance:

Maintaining a suitable minimum balance is essential to avoid fees and unnecessary financial strain. Analyse the minimum balance requirements, ensuring they align with your business's financial capacity. Choose an account with reasonable minimum balance criteria, allowing financial flexibility without compromising benefits.

For small business finances, these factors hold the key to selecting a current account that not only meets operational needs but also aligns with the business's financial goals.

Read Also: What is EBITDA Meaning

FAQs About Best Current Account

1) Which is the best current bank account for small business for the highest interest rate?

For small businesses seeking the highest interest rates, Kotak Bank's current accounts offer competitive returns on idle funds, providing a lucrative option for maximising interest earnings while ensuring efficient financial management.

2) Which is the best current account for proprietorship for the highest interest rate?

For the best Current Account for proprietorship, choose Kotak Bank's current accounts that stand out with attractive interest rates. Business owners can enjoy robust financial growth while benefiting from the bank's comprehensive services tailored for sole proprietorships.

3) Which bank's current account minimum balance?

Kotak Bank caters to varying financial needs with current accounts that offer flexible minimum balance requirements. It ensures accessibility for businesses of different sizes, allowing them to maintain financial stability without unnecessary constraints. The minimum balance for a Current Account may range from Rs. 10,000 to Rs. 1,50,000.