Current Account
What is a Current Account? Meaning, Features, Types & Who Needs One
4 min read
•
Aug 30, 2022
What is a Current Account?
A current account is a type of bank account designed for businesses and professionals who carry out high volumes of transactions on a regular basis. Unlike a savings account (which is meant for individuals to save money), a current account is built for operational needs deposits, withdrawals, payments to vendors, receiving from customers without limits on the number of transactions per day.
Key characteristics:
- No restriction on number of daily transactions
- Typically no interest earned on the balance maintained
- Overdraft facility available (borrow against your balance)
- Higher cash deposit and withdrawal limits
- Can be held by individuals, companies, trusts, NGOs, partnership firms, and HUFs
Current Account vs Savings Account Key Differences
Feature | Current Account | Savings Account |
Primary Purpose | Designed for businesses, professionals, and frequent transactions | Designed for individuals to save money while earning interest |
Transaction Limit | Unlimited transactions | Limited transactions, depending on the account type |
Interest on Balance | Generally does not earn interest | Earns interest on the account balance |
Overdraft Facility | Available (subject to eligibility and approval) | Typically not available |
Cash Deposit Limit | Higher cash deposit limits | Comparatively lower cash deposit limits |
Eligibility | Businesses, proprietorships, partnerships, companies, trusts, and eligible individuals | Individuals, minors (with a guardian), and salaried professionals |
Minimum Balance Requirement | Varies depending on the account variant | Generally lower than current accounts |
Best Suited For | Business owners, traders, startups, SMEs, and freelancers with frequent banking needs | Salaried individuals, students, homemakers, and retail customers looking to save and earn interest |
Key Features of a Current Account
1. Unlimited Transactions
No cap on the number of deposits or withdrawals per day. Essential for businesses that deal with daily payments and receipts.
2. Overdraft Facility
A current account gives you access to an overdraft essentially a short-term credit line linked to your account. This is a lifeline during short-term cash flow gaps.
3. Higher Cash Deposit Limits
Businesses dealing in cash (retailers, traders, hospitality) benefit from higher free cash deposit limits compared to savings accounts.
4. Cheque Book & Demand Drafts
Issue and receive cheques, demand drafts, and pay orders critical for B2B transactions and vendor payments.
5. Digital Payments
Full NEFT, RTGS, IMPS, UPI, and fund transfer capabilities transfer money to vendors, employees, and partners digitally.
6. Multi-city Access
Transact from any city send and receive payments across India without geographic restrictions.
7. Dedicated Relationship Manager
With premium current accounts, you get a dedicated relationship manager for business banking needs.
Who Should Open a Current Account?
A current account is ideal for:
- Sole proprietors and freelancers with high transaction volumes
- Partnership firms and LLPs
- Private and public limited companies
- Retailers, traders, wholesalers, and manufacturers
- Trusts, NGOs, and societies
- Startups receiving investor payments and paying vendors
If you're running a business and making more than a handful of transactions per month a current account is not optional, it's essential.
Types of Current Accounts at AU Small Finance Bank
AU Small Finance Bank offers a range of current accounts to match every business size and need:
**Regular Current Account** For day-to-day business transaction needs. Choose from multiple packages based on your transaction volume and cash handling requirements. Includes free business debit card, NEFT/RTGS/UPI transfers, and QR code facility.
**AU Vishesh Current Account** Designed for medium-sized enterprises with higher transaction needs. Features Auto Sweep-in/Sweep-out to maximise returns on idle funds, and higher free cash deposit limits.
**AU Power Current Account** Built for traders, retailers, and merchants. Includes POS and QR code setup, making it perfect for collection-heavy businesses. Waiver of balance maintenance charges on meeting collection milestones.
**AU Royale Business** Premium current account for established businesses seeking exclusive relationship banking, priority service, and enhanced limits.
Documents Required to Open a Current Account
Feature | Current Account | Savings Account |
Primary Purpose | Designed for businesses, professionals, and frequent transactions | Designed for individuals to save money while earning interest |
Transaction Limit | Unlimited transactions | Limited transactions, depending on the account type |
Interest on Balance | Generally does not earn interest | Earns interest on the account balance |
Overdraft Facility | Available (subject to eligibility and approval) | Typically not available |
Cash Deposit Limit | Higher cash deposit limits | Comparatively lower cash deposit limits |
Eligibility | Businesses, proprietorships, partnerships, companies, trusts, and eligible individuals | Individuals, minors (with a guardian), and salaried professionals |
Minimum Balance Requirement | Varies depending on the account variant | Generally lower than current accounts |
Best Suited For | Business owners, traders, startups, SMEs, and freelancers with frequent banking needs | Salaried individuals, students, homemakers, and retail customers looking to save and earn interest |
Note: Document requirements may vary. AU Bank representatives will guide you through the exact requirements.
How to Open a Current Account with AU Small Finance Bank
**Online:** Visit AU Current Account, select the current account type, fill in the application form, and an AU Small Finance Bank representative will contact you to complete the process.
**Offline:** Visit your nearest AU Small Finance Bank branch with your documents.
**Existing customers:** Contact your dedicated Relationship Manager to open an additional current account.
Frequently Asked Questions
1: Does a current account earn interest?
A: Generally, current accounts do not earn interest on the balance. However, AU Bank's AU Vishesh account offers an Auto Sweep feature that moves idle funds into a term deposit to earn returns.
2: What is an overdraft facility in a current account?
A: An overdraft allows you to withdraw more than your account balance up to a pre-approved limit, functioning as a short-term loan. Interest is charged only on the amount used.
3: Can an individual (not a business) open a current account?
A: Yes, individuals can open a current account, especially if they have high transaction needs such as active investors, traders, or professionals.
4: What is the difference between a current account and a cash credit account?
A: A current account is a basic transactional account. A cash credit account is a credit facility linked to your stock or receivables, used specifically for working capital financing.
5: How much cash can I deposit in a current account?
A: Cash deposit limits vary by account type and package. AU Small Finance Bank offers flexible cash deposit limits tailored to your business needs contact your Relationship Manager for details.
*Features and charges vary by account type and are subject to change. Please visit au.bank.in or speak with an AU Bank representative for current account details applicable to your business.*
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