Tips to Consider Before Opening a Current Account

As of early 2025, India has over 10 crore active current accounts, with digital current accounts alone witnessing a 42% year-on-year growth—driven by small businesses, freelancers, and start-ups. With rising digitisation, choosing the right current account isn’t just about a chequebook and overdraft; it’s about unlocking smarter features like UPI integrations, API banking, cash flow insights, and real-time settlements.

Whether you're a solopreneur, SME owner, or managing finances for a trust or society, selecting the wrong type of current account can lead to unnecessary charges, inefficient transactions, and missed opportunities. This guide helps you make the right choice based on your business structure, cash flow needs, and technology preferences.

Factors to Evaluate When Selecting a Current Account

Choosing a current account goes beyond comparing fees. Here’s what you should consider when evaluating options:

1. Type of Entity You Are

Different current accounts are designed for different legal entities—individual (proprietors or freelancers) or non-individual (partnerships, companies, NGOs, societies, etc.). You can read this blog to know more about individual and non-individual current account.

2. Digital Banking Capabilities

Look for current accounts offering end-to-end digital onboarding and integration with accounting software. A good digital current account saves time, reduces errors, and enables real-time financial control.

3. Monthly Average Balance (MAB) & Charges

Banks typically require maintaining a Monthly Average Balance (MAB). Falling below this may incur penalties. Choose an account with an MAB that aligns with your cash flow pattern.

4. Transaction Limits and Fees

Check for limits on cash deposits, NEFT/RTGS charges, and third-party transfers. For example, with Ujjivan’s Maxima Current Account, you have the flexibility to select your preferable cash deposit limit.

5. Value-Added Features

Consider benefits like Overdraft facilities, feature-rich Debit Cards, SMS/email alerts bulk payment support (ideal for payroll or vendor payments).

Why You Need a Current Account for Business

Running a business without a current account is like trying to operate a factory without electricity. Here’s why a dedicated current account is essential:

• Separation of Personal and Business Finances: This makes bookkeeping easier and ensures compliance during audits or tax filing.
• Higher Transaction Limits: Unlike savings accounts, current accounts allow higher transaction limits—vital for businesses dealing with large daily volumes.
• Professional Credibility: Payments made through a business account appear more legitimate to clients, vendors, and investors.
• Ease of Borrowing: Banks often assess current account history when evaluating loans, overdrafts, or working capital finance.
• Regulatory Compliance: For GST filing and input credits, a current account in the name of your business entity is often mandatory.

Ujjivan SFB offers a wide range of business current accounts – each meticulously curated to cater to your unique requirements.