How to Open a Current Deposit Account: Online and Offline

A current deposit account is an account that is basically meant for business purposes to fulfil the urgent monetary needs of a business. Also, there are a lot of advantages associated with a current deposit account.

In this article, we will discuss the features and all the important points one should make before opening a current deposit account.

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What Does a Current Deposit Account Mean?

Usually opened by businesspersons, a current deposit account is called a demand deposit. It is possible for the account holder to withdraw or deposit money at any time, as the deposit is repayable on demand.

What Are the Features of a Current Deposit Account?

Proper knowledge about a current deposit account account helps you better decide your future plans. So, let’s go through them thoroughly:

It bears no Interest.
Funds are always accessible by the account holder.
No limit is put on the number of withdrawals and depositions.
No limit is put on the number of cheques or transfers that are made through the net banking facility.

What Are the Benefits of a Current Deposit Account?

There are numerous benefits whenever we talk about current deposit accounts:

Cash can be withdrawn anytime, depending on the needs of the business.
Cash can be deposited or withdrawn at any branch that is convenient for the account holder.
The overdraft facility is easily accessible.
Different types of current deposit accounts are there for other people or entities.
A separate cheque balance is provided every month for the current account holders.
SMS banking is enabled for the customer to keep you updated about the transactions.

What Are the Eligibility Criteria for Opening a Current Deposit Account?

You should fall under the following criteria (any one) to be eligible to open a regular current deposit account:

You have to be a resident individual.
You may belong to a Hindu undivided family.
You may own sole proprietorship firms.
You may own partnership firms.
You may be a part of limited liability partnership firms.
You may own private or public limited companies.

How to Open a Current Deposit Account?

Steps for Opening a Current Deposit Account Offline

Step 1: Visit the nearest branch of your chosen bank.

Step 2: After that, approach an employee and fill out a form for opening a current deposit account.

Step 3: Fill out the form with all the required details and submit all the necessary documents that the bank has asked for.

Step 4: Submit the form to the concerned employee, and you are good to go.

Step 5: All the details of the procedure will be sent to you in text messages on the number that you have filled in the form.

Steps for Opening a Current Deposit Account Online

Step 1: Head to the official website of your chosen bank.

Step 2: Select the tab that enlists all the services.

Step 3: Click on the tab that displays the form for opening a current deposit account.

Step 4: Fill in the form and upload all the required documents.

What Are the Risks Associated With a Current Deposit Account?

There are no such risks associated with a current savings account. However, there are some disadvantages:

Loss on the interest due to zero interest policy.
Operational burden because of additional costs related to package accounts.
The paperwork and the process appear to be lengthy.
Corporate business transactions bring in vast amounts of fees.

Comparing Current Deposits with Savings Accounts, Fixed Deposits (FD) and Recurring Deposits (RD)

Criteria	Current Deposit Account	Savings Account	Fixed Deposit	Recurring Deposit
Meaning	Allows daily transactions	Allows limited transactions	Does not allow withdrawals till the set period is over	Monthly deposits are made till the predetermined period
Suitability	Traders and entrepreneurs	Salaried Employees or people having monthly income	Risk-averse investors	For people, who cannot deposit a lumpsum amount at once
₹Interest	No such interest rate	Bank offers interest	Varies according to the bank	Depends on the bank
Overdrawing	The overdraft facility is accessible	No overdraft facility	Overdraft is accessible at 1-25 higher interest rates	Overdraft is available
Minimum Balance	Higher when compared to a savings account	Usually low	The minimum balance required is ₹1,000	A minimum of ₹100 is to be deposited monthly

A current deposit savings is a boon for societies, trusts, businessmen, and associations. Any other kind of account can not possibly replace the liquidity provided by a current. Therefore, it happens to be highly favoured by most enterprises despite some of its presumable cons.

FAQs about Current Deposit Accounts

All

What is the minimum balance for the current deposit account?

The minimum deposit for the current deposit account is ₹10,000.

Is GST mandatory for the current deposit account?

GST is not mandatory if you open a current deposit account.

Is money in the current deposit account taxable?

According to Section 194N, no tax will be deducted from any accounts unless the transactions exceed ₹1,00,00,000.