Imagine if there were no bank accounts.. having to carry cash everywhere, no debit cards, no cheque books.. Life would be really dangerous and difficult, wouldn’t it be? Well thanks to our fore-fathers we do not need to worry about it anymore. These days we are spoilt for choices. There are hundreds of banks trying to sell their accounts to us.
Types of bank accounts
Banks offer different kinds of accounts viz. savings bank account, current account, loan account, overdraft account, investment account, deposit account, etc etc. Out of these we’ll cover the current account in this article.
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Current Account
Current accounts are transactional accounts opened for businesses (non-individuals). These accounts help businesses to collect payments from their customers and make payments to their vendors.
Things to look for when opening a current account:
Bank
How trustworthy is the bank? How good is its reputation? This is the most important parameter. Safety of your money is of utmost importance.
Overdraft facility
Business, especially small, are always short of working capital and look towards their bank to support them at reasonable interest rates.
Online Banking facility
With increasing popularity of internet, you’ll hardly find an office without computers and internet connection. Online banking is quick and convenient. Online banking involves checking account balance, transferring funds, paying taxes and other normal banking services. This has become a hygiene factor while evaluating banking options these days.
Phone Banking facility
Ability to transact on your account over phone. This is also a useful facility. However, automated answering machines making you hold the line for hours before you can talk to an actual person make it frustrating to use. Still, a good facility to have.
Mobile Banking facility
A few banks have started providing apps that can be downloaded on mobile phones. These apps allow a multitude of banking transactions over the mobile phone making it super convenient. However, the apps are still not very stable and highly unreliable.
Network
Number of branches and ATMs
Charges
In the current scenario, when all the banks are offering more or less the same facilities, their charges is what sets them apart. The charges should be evaluated along with the quality and quantity of services the bank provides.
Having looked at the major parameters for evaluating banks for their current account offering, let’s look at which are the top banks in we’ve checked. We have had current accounts in the following banks (and hence will be able to give you our judgement only on them):
Citibank, HSBC, ICICI Bank, HDFC Bank, IDBI Bank, Bank of India and SBI.
In terms of charges, the multinational banks are at the most expensive. However, their services do not necessarily match their charges. A false feeling of exclusivity and status aside, we found these banks poor value for money.
Among the nationalised banks, we found Bank of India to be really good. Really low minimum account balance requirement, all the modern banking facilities, really low charges and above all, a personal touch and warmth that is missing in all modern private banks.
Among, the private Indian banks, it’s a tough fight between ICICI and HDFC. Both are almost equal in terms of services offered, charges, etc. However, ICICI scores over HDFC in terms of sheer number of branches and ATMs and hence the reach.
The final fight is between Bank of India and ICICI. The only key difference we see between the two is that ICICI is very well integrated with all merchant establishments and payment gateways though lacking the personal touch of Bank of India.
Tough decision but the final winner has to be ICICI Bank.
As we said earlier, this result is from the fixed list of banks that we have compared. It may well be possible that some bank that we have not included in the comparison may be better. If that is the case, we would like to know about it and all our readers will appreciate if you could share it in the comments below.
We would also like to know if we’ve missed any parameter or have gone wrong somewhere. Do share your feedback. Also, do share this post with your friends by sharing it on Facebook, Twitter and Google+ using buttons below.
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Which is the best bank to open a current account for my small business?
ICICI if you want to go with a private bank or Bank Of India if you want public sector bank.
How does ICICI score over Kotak? Kotak are the ones who got in free ATM transactions, Netcard facility and the SMS updates are second to none.
This blog is trending towards banking needs for S and M businesses. For a consumer, i prefer IDBI (Very friendly staff. Excellent customer service) and Kotak (very innovative, super banking experience)
This is a good article. Very informative. Thank you very much Ami 🙂
Mahesh, you are absolutely right. This post is more for businesses as we are comparing CURRENT accounts. I agree with your points on Kotak. They are comparatively smaller and hence more agile with new services.
And thanks for your kind words 🙂
You are IDBI Bank is Friendly Bank yup its True But About service i applied 4 times for NET Banking Still Now Not got Yet. If any service means got too much delay.
Hi,
The article you posted is good in terms of the parameters to be selected. But when it came down to select which bank is good, i am still not clear as the differences mentioned are very less.
I run an online venture, which just got registered. I need a bank where in i want to create a current account, where in my customers can transfer money. I am confused in HDFC or Axis.Please suggest with fair justifications of Pros and Cons.
Regards,
Very good article. thanks for writing. I am planning to start an online venture. My business will need frequent transfer of money to various other stakeholders. In addition to those factors you discussed in the post, which bank’s net banking do you think is quick, easy and reliable for this purpose?
Praveen, online transfers are quick and easy with all bank accounts. Just that some banks charge for online transfer while some don’t. Bank of India does not charge while ICICI, HDFC, etc. do.
Which is best bank for online banking with less charges
My choice is Bank of India
hi naimisha I know uve not included Axis bank while writing the article. but did u have any chance later on to review it cos my friend has an Axis current account n he is happy so m stuck between axis, icici n bank of india. and being a small business owner charges really matter a lot. so I want a suggestion based on minimum account balance, charges, transfer facilities and then other facilities which would make life easier.
thanks
Bank of India is the best based on all the parameters you are considering.
My experience with BOI is a bit frustrating in the sense of time delay in service. You recieve atm card after a month if your are not in the prime cities.
So it also depends on Location.
For online banking ICICI is the best.
This game is about Services and Benefits.
I agree with your point on Services and Benefits.
Thanks for sharing Vivek 🙂
Hi Naimisha,
I don’t think ICICI will be the right choice in terms of Current Accounts. Please have a look at this link.
http://www.quora.com/Which-Indian-bank-has-the-best-online-corporate-banking-site-for-current-accounts
I’ve one current account with HDFC and I was planning to open another one with any other bank and your article and its comments really helped me to choose ICICI as in my next banking partner.
Hey Rakesh, happy to know that our community helped you in making your decision 🙂
By the way, you’ve got a nice blog http://www.delhigeek.com/
as i want to shift my cc account from canara bank to ing vasaya bank.
as per ing representtive i come to knw that me paying for some services i.e free cheques, free d.d as compared to canara… but i m confused abt new ing vasay bank. is it right decision to changew
You will find some really helpful services from private sector banks. Though you have to check the charges for the same. I would anyday prefer ING Vysya over Canara bank.
Hi
naimisha
I am newly starting pvt ltd so I want loan for working capital
which is the best bank?
Hello Ravi,
My personal experience has been that private banks would ask for more collateral and paper work as compared to a nationalised bank like SBI or Bank Of India.
Branch managers in nationalised banks seem to have more power in approving loans. If you have a good rapport with the BM, your work tends to get easier. And I am not suggesting any illegal way of getting the loan. If the BM truly believes in you and your business, he will approve.
which is best bank to open current account.
which one is affortebal for small business
Where we are going towards being cashless….HDFC charges for RTGS and NEFT payment while ICICI allows it for free. So ICICI definitely wins big time on it.