How Many Current Account Can We Have in India?
Current Account in India plays an important role for business owners as it helps them have a dedicated business banking account, using which they can deal with daily transactions with vendors and other important clients. Banks offer the ease of opening a Current Account with a few important documents and standard eligibility. However, what can be the number of Current Accounts if you have multiple active businesses? Read this blog and know how many accounts are possible with a bank in India. We will also discuss the key benefits of a Current Account.
What is a Current Account?
A Current Account is a dedicated bank account that is meant for businesses in order to handle large transactions to make business finances easy. It is also important to know that you do not earn interest on the money kept in this bank account. Moreover, you can take advantage of benefits like higher transaction limits and added features such as overdraft facilities, cheque books, and online banking. It is mainly used for business purposes like receiving customer payments and paying suppliers, vendors, or salaries.
Can You Have More Than One Current Account?
Yes, you can open more than one Current Account in India. Many businesses and individuals prefer to do this because it helps them with their finances in a better manner. Here is how:
- It is useful when you want to manage finances for different lines of business (for example, a shop owner may have one account for clothing sales and another for electronics).
- Having multiple accounts can also help to maintain personal vs business transactions separately.
Also, note that banks expect you to maintain a minimum balance, which a quarterly average balance (QAB) in every Current Account and non-maintenance can result in charges.
Why Do People Open Multiple Current Accounts?
Below are the major reasons why people may want to have multiple Current Accounts:
1. Segregating Business Transactions
If you have more than one business, it makes sense to have multiple Current Accounts. This way, each business’s income and expenses are recorded separately, making accounting much easier.
2. Managing Personal and Business Money
Many self-employed people like to keep their personal and professional transactions separate. Having a dedicated Current Account for business avoids confusion at tax time.
3. Better Banking Relationships
Maintaining multiple accounts in different banks can help build strong ties with those banks. You can use it when you want to apply for loans, overdraft facilities, etc.
4. Backup for Emergencies
At times, one bank’s services may be down due to technical issues. This is the time when you can use another Current Account in a different bank and ensure your business does not hit a pause.
Things to Consider Before Opening Multiple Current Accounts
Before opening multiple Current Accounts with a bank, consider these important things:
1. Minimum Balance Requirement
Every Current Account has a quarterly average balance rule, which may vary from one bank to another and the type of account. Maintaining this in multiple accounts can be costly.
2. Bank Charges
Current Accounts often come with charges for cheque books, demand drafts, NEFT/RTGS transfers, and other services. More accounts may mean higher overall charges.
3. Accounting Complexity
If you don’t maintain proper records, handling multiple accounts can become confusing. It is important to keep track of every transaction to avoid errors.
4. Compliance and Taxes
During audits or tax filing, you must provide statements from all your Current Accounts. Having too many accounts without proper management can cause unnecessary trouble.
Advantages of Having More Than One Current Account
Know about the important benefits of having multiple Current Accounts:
- Flexibility
Having more than one Current Account provides flexibility. You can use one account for strong digital services like online transfers and mobile apps, while another can be dedicated to branch-based support for in-person assistance.
- Better Offers
Different accounts often come with different benefits. One account may allow easy NEFT transfers, while another offers lower transaction fees or better overdraft facilities. Multiple accounts let you leverage the best features each account provides.
- Convenience
If your business operates in multiple locations, having Current Accounts tailored for each city can make operations smoother. It saves time, reduces travel, and helps you manage payments and collections efficiently across different areas.
Smart Ways to Manage Multiple Current Accounts
If you do decide to open more than one Current Account, here are some tips to manage them wisely:
- Keep a Clear Purpose
Open an account only if it has a clear role. For example, one for business transactions and one for operational expenses.
- Use Online Tools
Most banks, like ICICI Bank, offer the InstaBIZ app and Net Banking. Use these to track balances and transactions easily.
- Avoid Unnecessary Accounts
Don’t open too many accounts just because you can. Stick to the minimum number you actually need.
- Stay Updated on Bank Policies
Different banks may update their rules on minimum balances, transaction limits, or charges. Stay informed to avoid penalties.
Conclusion
The answer to how many Current Accounts we can have in India is simple. You can have more than one Current Account. It can help separate business and personal transactions, manage multiple ventures, and build stronger banking relationships. But remember, with more accounts comes more responsibility. Always keep up with minimum balances, track charges, and stay compliant with banking rules.