Types of Current Accounts

Opening a current account can be beneficial for you if you are looking for liquidity when it comes to financial activities, such as running a business or an enterprise. You can open a current account with most banks, which does not require a long, drawn-out process to complete. 

 

This can be useful for individuals or entities such as businesses, professionals, traders, wholesalers, and manufacturers, among others. These accounts not only help in carrying out all day-to-day transactions but also provide a wide range of benefits. 

 

Read on to learn more about the different types of current accounts, along with their varied features and functions. Learn more about these in the sections below:

The following are some of the major types of current accounts and how they operate:

1. Standard Current Accounts

These are some of the most common current accounts available, requiring the maintenance of a specified minimum monthly average balance. Furthermore, standard current accounts do not necessarily provide any interest on the deposits. However, they provide benefits such as debit cards, overdraft facilities, internet banking, checkbooks, and more. 

2. Basic Current Accounts

Such current accounts are tailored for individuals with lower incomes, such as college students, pensioners, or those who require immediate access to their funds. This can help them manage their accounts more efficiently and systematically. However, they feature more restrictions in their functioning and usage in comparison to types of current accounts, such as a daily transaction limit. 

3. Packaged Current Accounts

This type of current account features more benefits than the standard current account. These include added rewards, different kinds of insurance policies, medical support, roadside assistance, and more. Most packaged current accounts usually come with a monthly fee and other related charges. 

4. Premium Current Accounts

Premium current accounts are more suitable for entities such as businesspersons, entrepreneurs, traders, corporates, and High Net-worth Individuals (HNIs) who conduct large volumes of transactions of higher values. These offer features and benefits that are customised to their needs and requirements and help them conduct all transactions in a smooth and seamless manner, without delays. 

5. Foreign Currency Accounts

Such accounts are ideal for those residents or Non-resident Indians (NRIs) who wish to store their funds in foreign currencies and conduct transactions through them accordingly. The account is through most issuers in the country, which permit various currencies such as USD, Euro, GBP, JPY, and CAD, among others. These may also allow you to earn interest on your deposits. However, these accounts are not covered by the national deposit insurance schemes. 

6. Cash Management Current Accounts

This type of premium account caters to businesses that conduct high volumes of transactions. Most of them feature cash management tools such as automated collections, payments, and account reconciliation. Furthermore, these can also provide other features like real-time analytics and reporting, among others. 

7. Single Column Cash Book

Single-column cash book accounts provide only a few basic features of a current account. However, their primary purpose is to help provide a space to track and manage your day-to-day transactions through two separate columns: debit and credit of finance. It is important to note that only cash-pertaining transactions are recorded in this account, rather than cheques issued/received or purchase/sale discounts. 

Below mentioned are some of the differences between the different types of current accounts:

With this, you may have gotten a much better and more extensive understanding of the various types of current accounts. You can choose the most appropriate type of current account based on your preferences and financial requirements, along with an account’s cost-effectiveness.