A current account is a crucial service that any business needs. As a business owner, whether it is a sole proprietorship or a bigger business, your choice of current account impacts your management of payables, cash flow, and daily transactions. Poor selection can lead to being a victim of avoidable banking fees and having limited access to online banking and mobile banking.
Selecting an appropriate current account depends on the size of your business, the number of your operational transactions, and your operational style. Below is an outline of the more relevant aspects involved when selecting for current accounts.
What to Look at Before Opening a Business Current Account
Transaction Volume and Frequency
First, attempt to determine the number of transactions your business completes within a month. A significant number of transactions will mean that you will have to secure a current account that is either free of transaction fees or one that has a substantial transaction limit. Conversely, if your business operates on a low number of transactions, any current account will be more than enough.
Minimum Balance Requirements
Standard accounts usually have a Minimum Average Balance (MAB) of ₹10,000, while MABs of ₹1 lakh or ₹2 lakh or minimums may be seen in higher-tier accounts. Each account class has an MAB condition. If you fail to maintain the AMB, you will face penalties. Assess whether AMB requirements will be unduly burdensome on your business liquidity.
Fee Structure and Hidden Charges
Don’t just scratch the surface and look at the headline features. Attempt to go as far as you can in assessing the totality of the fee structure.
- Limits for fee-free cash deposits and withdrawals, and corresponding fees thereafter
- Cash fees for NEFT, RTGS, and IMPS.
- Checkbook fees and returned check fees.
- Annual fees for debit cards and ATM fees.
- Service charges for the account.
A clearly defined fee structure allows for operational costs to be planned and avoids unexplained deductions. Most Important Features in Business Banking
Which Features Matter Most for Business Banking
| Feature | Why It Matters | Ideal For |
| Overdraft | It eliminates the need for external short-term borrowing | Seasonal businesses, traders |
| Netbanking and mobile app | Provides payment and fund transfer capabilities and allows account monitoring | All business types |
| Integrated payment collection | Facilitates direct customer online payments | E-commerce, service providers |
| Bulk payment | Supports batch payments for salaries and vendors | Businesses with 10+ employees |
| Multi-user access | Enables different account holders to manage the account with defined permissions | Partnerships, companies |
| Doorstep banking | Banking service covers cash and check pickup straight from your office | Retail and cash-heavy businesses |
Digital Banking Capabilities
By 2026, digital business banking will be the norm. It is expected that your business current account will offer secure online banking and mobile banking options. Banking alerts, instant fund transfer options (UPI and IMPS), real-time banking statements, and the ability to accept online payments directly through the account will be essential.
Overdraft and Credit Facilities
For short-term cash flow issues, you can use an overdraft facility. Your account will be allowed to go below zero to a certain amount, and this is useful for companies that have seasonal fluctuations in their revenue or for those that have revenue collection that is delayed. Different accounts will have different limits, interest rates, and repayment terms, so you should consider this before deciding on an account type.
Branch and ATM Network
If cash transactions at your business are frequent, you will need branch and ATM access close to your business. This is particularly true if you have business operations in different cities. If your account has a certain number of free transactions where the branch is not your home branch, be sure to use those.
Conclusion
It is important to open a business account, and it takes some time. However, it is important to choose the right account because it is a business decision.
Your account, for example, should have a good match for your transaction volume, minimum balance requirement, and particular business services.
The account that has the features you need will provide a cost, and you should prioritize accounts that have transparent fee structures. Good business accounts will support your business and make it easier for your finances to be managed.
Also read: The 7 Best Non-Bank Lenders for Fast Business Funding
