If you run a business, it is imperative that you set up a Current Account. A Current Account is one of the most beneficial tools to help manage your business finances. This tool is used by small and medium sized businesses, trusts, corporations as well as societies to manage financial operations smoothly and securely.
How to open a Current Account in a bank
If you’re confused about how to create a Current Account, you’re in the right place. In the digital era, the procedure to open a Current Account is fairly simple.
Check your eligibility
Before submitting your Current Account application, check if you are eligible. The following business entities are eligible for Current Account enrollment:
- Sole proprietorships
- Partnerships
- Limited Liability Partnerships
- Public companies
- Private companies
Select the right Current Account
Once you have confirmed your eligibility, the next step is to select the right Current Account. Banks offer multiple products based on the business sector, type of business entity, transaction volume and unique business needs. The monthly average balance and cash deposit limits will vary based on these factors.
For instance, if you are opening a corporate Current Account, you may need a larger cash deposit limit as compared to opening a Current Account for retirees who have ventured into consulting.
Choose the mode of application
Most banks do not charge a Current Account application fee, be it one you apply online or by physically visiting a bank branch. If you are planning on opening a second Current Account, check first if your bank allows it. Alternatively, you can open it at a different bank.
Here are the steps to open a Current Account:
Online
- Today, you can open a digital Current Account within 24 hours. Fill out the Current Account application form online, and submit it along with the relevant documents.
- Your KYC (Know Your Customer) verification happens via a video call.
- If your Current Account registration fulfils all the requirements, your account can be allocated within 20 minutes of the call.
- Fund your account and start using it.
Offline
Fill out the Current Account application form correctly and submit it along with your documents. The bank will contact you for the next steps. Setting up a Current Account offline can take one to two business days.
Documents required for a Current Account
The documentation for your Current Account depends on the type of business entity. Here’s a snapshot of the documentation needed w.r.t. the type of business you won:
Sole proprietorships
- Entity and address proof of the firm
- Proprietor's PAN card
- Proprietor’s address proof
- Passport-size photographs
Partnerships
- Entity and address proof of the firm
- Firm's PAN card
- Registration certificate of the firm with the registrar of firms
- Partnership letter signed by all partners
- Address proof and ID proof of the partners
- Passport-size photographs of partners
- Stamp / seal of the firm
- Beneficial owner and Foreign Account Tax Compliance Act (FATCA) declaration
Limited Liability Partnerships
- Limited Liability Partnership Agreement
- Certificate of incorporation
- PAN card of the firm / Form 60
- List of all existing designated partners and designated partner identification number (DPIN) issued by the Central Government on letterhead
- Address proof of the entity
- Board resolution
- Address proof and ID proof of the partners
- Passport-size photographs of partners
- Beneficial owner and FATCA declaration
Private / public companies
- PAN card of the company
- MOA, AOA and Certificate of Incorporation
- Company Certificate of Commencement or INC 21 along with ROC receipt (Public Ltd Co.)
- Address proof of the company
- Board resolution
- Address proof and ID proof of the signatories
- Passport-size photographs of signatories
- List of directors and their DIN
- Beneficial owner and FATCA declaration
Also Read: Complete guide to opening a Current Account
Conclusion
Now that you are aware of the procedure to open a Current Account, ensure that you choose the right product for your needs. Axis Banks offers several Current Account products designed to serve the needs of various business sizes and entities. You can open an account online within just 24 hours.
The minimum balance required is ₹15,000 in metros, and ₹7,500 in rural / semi-rural areas. Reap the benefits of virtual onboarding, overdraft facilities, global transactions, Forex services, unlimited NEFT/ RETG online transactions and cash withdrawals, a business Debit Card, and secure payment solutions.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
