The choice of which one to have, a current or savings account has an impact on one’s financial journey. Although there are distinct purposes for both accounts, the process of converting one into the other is not an easy task, considering its fundamental differences and functions.
In this blog, we will focus on how to convert a savings account to a current account and explore the intricacies of savings and current accounts, highlighting their benefits, eligibility criteria, and the steps involved in opening a Kotak811 current account.
Can you convert a savings account to a current account?
Converting your savings account to your current account is not easy. A savings account primarily encourages individuals to save funds via formal banking channels, meanwhile the current account is mostly for business purposes. In addition, the Know Your Customer (KYC) is a prominent process for this conversion.
Recognising these distinctions, the Reserve Bank of India has formed regulations that reflect the separate functions of both types of accounts. Direct conversion from savings to a current account is not possible.
However, if one wishes to convert their account, they need to close their savings account and open a new current account, which will be followed as per the given guidelines.
Difference between savings account & current account
Interest earnings:
The major difference is the interest rate, with savings account one can enjoy returns on their deposits and savings, however, the current account does not allow that privilege as there is no return on interest.
Number of transactions:
With a current account you can enjoy unlimited transactions, unlike savings accounts which hold a limitation on transactions within a specific time and period.
Purpose:
Current Accounts are utilised for business-related activities such as managing day-to-day finances, including commercial activities. Savings Accounts, on the other hand, serve as a means for individuals to save money and deposit extra funds for future use.
Suitable for:
Current Accounts are suitable for business people needing a flexible account for their financial management, while Savings Accounts are for individuals for saving money and personal use.
Must Read: Everything You Need To Know About Current Account
Advantages of opening a current account
Opening a Current Account comes with a range of benefits that cater to the financial needs and convenience of customers. Here are some advantages:
Premium banking experience:
With a current account, customers get the benefits of premium banking services. It usually includes personalised services and customised solutions for their financial needs.
Overdraft facilities
Current Account holders get overdraft benefits, which make sure they always have money for their emergency situations. The overdraft limit is usually based on the customer's credit score, creating a safe financial net.
Free ATM transactions
Many Current Accounts provide free ATM transactions for the first year, providing access to money when required, incurring additional charges. However, it is important to remember you might be charged a maintenance amount annually.
Multi-city cheque books and nomination facility
Current Account holders can use the multi-city chequebooks facility, which allows them to facilitate seamless transactions across different locations. Additionally, the nomination facility allows customers to designate beneficiaries for their account holdings, enhancing security and convenience.
Transferability and monthly statements
Current Accounts offer the flexibility of transferring accounts between branches of the same bank, ensuring continuity of banking services regardless of location. Customers also have access to monthly statements, enabling them to track their financial transactions efficiently.
How to open Kotak811 current account
Open Kotak 811 Current Account , follow these simple steps:
Check eligibility:
Ensure you meet Kotak811 Current Account eligibility criteria, considering your business size and stage.
Gather documents:
Collect necessary documents based on your business structure, such as PAN card, address proof, and business registration documents.
Complete application:
Contact Kotak branch representatives or visit a nearby branch to initiate the application process. Provide accurate and verifiable information.
Make initial deposit:
After approval, activate your account by making the initial deposit through cheque, online transfer, or cash deposit.
Start operating:
Once the initial deposit is made, your Kotak 811 Current Account will be active, and you can start using it for your banking needs.
Must Read: Differences Between Current & Savings Account
Current account eligibility criteria
The eligibility criteria for opening a Current Account with Kotak811 are broad, catering to a diverse range of individuals and entities:
- Individuals (resident Indians)
- Sole proprietorships
- Hindu undivided families (HUFs)
- Partnerships / Limited liability partnerships
- Private limited companies
- Co-operative societies/subsidiaries and associations/trusts/clubs
- Religious organisations / educational institutes/government bodies
- Association of Persons
- Public sector undertakings
- Domestic banks / regional rural banks / domestic cooperative banks
- Foreign institutional investors / foreign nationals residing in India / foreign companies
- Foreign banks
- Insurance companies / mutual funds/share and stock brokers
- Related parties
- Non-government organisations (NGOs / charitable trusts)
Advantages of savings accounts
Despite not being convertible into a current account, there are several benefits of a savings account which help an individual in the management of their funds and finances securely.
Financial planning
Savings accounts are a useful tool for financial planning, which gives motivation to the individual to invest wisely and save for their future, enhancing their financial management skills.
Interest earnings
There is a chance of earning interest on the money, kept in one’s savings account, which helps them to have returns and money to grow over time through.
Emergency fund
Savings accounts are like a secure platform for building emergency funds, making sure that individuals have readily accessible funds when there is a need for emergency funds or when there is financial need, on an urgent basis. These funds continue to earn interest at a fixed rate, enhancing the account's value over time.
Convenience of transactions
Savings accounts offer the flexibility of conducting both offline and online transactions, giving convenient access to their funds, for various purposes. In addition, one can easily have cash withdrawal at convenience with several beneficial features.
Conclusion
While converting a savings account into a current account may not be feasible, there are benefits of both savings and current accounts as per their features. Savings account serve as essential tools for financial planning, providing individuals with opportunities to save, earn interest, and make emergency funds for future needs.
Conversely, current accounts cater to the transactional needs of businesses and entities, which provides you with premium banking facilities.
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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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