What is a Current Account? Key features, benefits & important details

  • Published on: 18 Apr 2024
What is a Current Account? Key features, benefits & important details

There may be instances where you may have come across the question, ‘What is a current account?’. Here’s what it means.
The banking sector offers different types of accounts that cater to your diverse financial needs. One such account is a current account, best suited for business owners and companies. 

As such, it has some distinguishable attributes from a savings account, which allows it to service the specific needs of enterprises. Read on to learn about the current account, its features, benefits, how it differs from a savings account, and more. 

Current Account: A Brief Overview 

This is a type of non-interest-earning bank account mainly operational for business-related transactions. This explains why there aren’t restrictions on the number of transactions, such as cash withdrawals, fund transfers, cash deposits, etc., in a current account. 

The following entities can open a current account: 

  • Individuals 
  • Sole proprietors
  • Partnership firms
  • Private companies
  • Public limited companies
  • Societies
  • Trusts 
  • Hindu Undivided Family

Features of a Current Account

Here is a quick overview of the features and benefits of a current account. 

Feature & Benefits Description 
No InterestThis type of account does not earn interest on the deposit.
Easy AccessUsing this account, you can access your funds instantly via card, cheque, net banking, mobile banking, etc.
Higher Withdrawal FacilityYou can make an unlimited number of withdrawals from your current account.
No LimitThis account doesn’t have a limit on the number of transactions you can make in a day, which can be beneficial for businesses.
Overdraft FacilityDespite exhausting your account balance, you can still withdraw funds using the overdraft feature of the current account, which gives you access to instant credit.
Minimum BalanceAll banks have different limits for minimum average balance, which you must maintain to avoid penalties.

Difference Between a Current Account and a Savings Account

To better understand the meaning of a current account, here are all the differences you need to know. 

Parameters Savings Account Current Account 
Purpose Generally used to secure funds for short-term goals, build an emergency corpus, or earn interest on surplus funds Used to make regular transactions for business-related expenses
SuitabilityIdeal for salaried employees and people with regular incomeSuitable for individuals who require a high transaction limit, such as business owners, entrepreneurs, self-employed professionals, etc. 
InterestEarns interest annually depending on the rate, which varies from one bank to anotherDoesn’t earn any interest
Overdrawing FacilityThis type of account does not allow the withdrawal of funds over and above the available balanceYou can withdraw additional funds to meet emergency financial requirements 
Minimum Balance Requires you to maintain a minimum balance depending on the financial institution The minimum balance requirement depends on the respective bank
Transactions You can only make limited transactions per dayThere is no limit to the number of withdrawals you can make in a day 

Steps to Open a Current Account 

Here is a step-by-step guide on how to open a current account. 

  • Step 1: Choose a bank by comparing their benefits, eligibility criteria, and other account features  
  • Step 2: Visit the bank’s website 
  • Step 3: Go to the ‘Current Account’ section and check the account opening options 
  • Step 4: Fill in the form with your personal and other details 
  • Step 5: Download the form and take out a printout  
  • Step 6: Visit your nearest bank branch 
  • Step 7: Apply with the relevant documents
  • Step 8: Complete the KYC process and make an initial deposit 

Following these steps, you can easily open a current account with your preferred bank. However, all financial institutions have their eligibility criteria, a variety of account types, and required documents, which you must check before applying. 

This way, you can save time on your application process. If you want funds to support your business, consider the Fibe Instant Cash Loan. We offer up to ₹5 lakhs with no end-use restrictions, enabling you to use them as per your needs.

In addition, you can enjoy a 100% digital application, minimum documentation, zero foreclosure charges, affordable interest rate and a flexible tenure of up to 36 months. So, download our Personal Loan App on your Android or iOS device or visit our website today to apply. 

FAQs on Current Account

What is meant by a current account in a bank?

This is a type of banking account used by merchants, business owners, and companies to make day-to-day transactions. Companies also open current accounts for their employees for salary transactions. 

Does the current account have an ATM card?

Yes, you can use this card to withdraw funds as well as authenticate your digital payments. 

Can I convert my savings account to a current account?

No, it isn’t possible. Remember, a current account has been exclusively designed for business transactions. Since a current account has additional benefits to a savings account, it makes business transactions easy.

Can I withdraw money from a current account?

Yes. You can withdraw money from your current account using an ATM card without any limit on daily transactions. 


Our top picks

Can Millennial Stress be Resolved by Financial Wellness?
Finance | 3 mins read
How Organisations Can Measure the Impact of Financial Wellness Programs
Finance | 3 mins read
How Can HR help Overcome Staffing Challenges in the Digital Age?
Corporate | 3 mins read
5 Signs of A Good HR Function
Corporate | 3 mins read