Current account · business banking
The account every other payment flow runs through
Customer payments settle into it, suppliers and staff are paid from it, taxes leave it. A business current account is less a product than the ground floor of your finances. Here's how it works, how to set it up well, and how to run it without surprises.
- 09:05UPI collections settledYesterday's customer payments+3,42,180
- 10:40NEFT from Shreeji TradersInvoice 7781+48,500
- 12:15RTGS to Kaveri PackagingSupplier invoice INV-2291−2,40,000
- 14:00Card settlementNet of provider fees+1,12,400
- 16:30GST paymentMonthly return−86,200
- 18:05Refunds batch12 customer refunds−14,760
Money in
Settlements from payment providers, bank transfers from customers, cash and cheques.
Money out
Suppliers, salaries, refunds, loan repayments and taxes.
Control
Who can move money, up to what amount, and with whose approval.
- Talk to Peneu
Current account or savings account?
The difference is purpose. A savings account is built for an individual to keep money and earn interest on it. A current account is built for a business to move money: many transactions a day, business features such as overdrafts and multiple signatories, and an account in the business's own name that customers and suppliers can pay into and receive from.
Running business money through a personal savings account is a common early shortcut, and a common later headache. It mixes personal and business transactions, makes accounting and tax work harder, and can make the business look less credible to the people paying it.
| Savings account | Current account | |
|---|---|---|
| Built for | Keeping personal money | Running a business's transactions |
| Held in the name of | An individual | The business (or its proprietor, for a sole proprietorship) |
| Transaction volume | Moderate | High, as a business needs |
| Common business features | Few | Overdraft, multiple signatories, bulk payments, API access |
| Interest and charges | Set by the bank | Set by the bank; often minimum-balance or fee based |
General comparison. Features, interest and charges differ by bank and by account variant.
Opening one: what the bank will check
A bank opening a current account is doing business verification: confirming the business exists, who owns and runs it, and who may operate the account. The documents vary by entity type and bank, but the questions are the same ones described in the KYB guide.
| Entity | Proof the business exists | Who operates the account |
|---|---|---|
| Sole proprietorship | Registrations in the business name, such as GST, and the proprietor's identity | The proprietor |
| Partnership | Partnership deed and the firm's PAN | Partners named in an authority letter |
| LLP | LLP registration and the LLP's PAN | Designated partners, per a resolution |
| Company | Certificate of incorporation, constitution documents and the company's PAN | Signatories named in a board resolution |
Typical requirements; each bank's list, set under its KYC rules, is what applies.
Who can move the money
The single most important setting on a business account is its operating instructions: who may sign, alone or jointly, and above what amount. It's decided when the account is opened, recorded by the bank, and applies to cheques, branch instructions and online banking alike.
Set it for the business you'll be in two years, not the one you are today. A founder who can move any amount alone is convenient on day one and a real risk once there are employees, investors and larger balances. Online banking usually lets you add a second layer on top: one person prepares a payment, another releases it.
Any one signatory. Simple; suits small teams and small amounts.
Any two jointly. Stronger; common above a set amount.
Maker and checker online. One prepares, another releases; limits per role.
Separate view-only access. Accountants and auditors see statements without moving money.
Money in, money out: the rails an account connects to
A current account is the endpoint of every payment rail your business uses. Knowing which rail each flow uses tells you when money arrives, what reference it carries, and how to trace it when something goes wrong.
| Flow | Usually arrives or leaves by | Read more |
|---|---|---|
| Card and UPI collections | Settlement from your payment provider, net of fees | Settlement |
| Customers paying by transfer | NEFT, RTGS, IMPS or UPI | Virtual accounts |
| Suppliers and staff | NEFT, RTGS, IMPS or UPI payouts | Payouts |
| Recurring collections | NACH or mandates debiting customers, credited to you | NACH |
| Refunds | Back to the customer's original method, or a payout | Refunds |
NEFT and RTGS run round the clock on every day of the year, according to RBI's FAQs; your own bank's processes and approvals may still keep office hours.
Overdrafts and credit on the account
Some current accounts come with, or can be given, a limit that lets the balance go below zero. It's a credit facility: the bank assesses the business, sanctions a limit, charges interest on what's actually used and reviews it periodically. It can smooth the gap between paying suppliers and being paid by customers, but it isn't free money and it isn't automatic.
For businesses thinking about credit more broadly, the working capital guide and the line of credit guide explain the options and how they differ.
One account or several?
Everything through one account is simple until reconciliation takes a day a week. Many growing businesses split flows across accounts with a clear job each, so every account's statement tells one story.
Split only where it helps: every extra account is another balance to fund, another statement to reconcile and another set of signatories to keep current.
| Account | Job | Why separate |
|---|---|---|
| Collections | Receives settlements and customer transfers | Inflows reconcile cleanly |
| Payouts | Funds suppliers, refunds, partner payouts | Limits exposure if payout credentials are misused |
| Payroll | Funded before payday | Salary data seen by fewer people |
| Tax reserve | Holds money set aside for taxes | It isn't spent by accident |
| Second bank | Backup for critical payments | A bank outage doesn't stop the business |
Statements and reconciliation
The bank statement is the final word on what happened in the account, and reconciling your books against it is how you catch everything else: a payment that didn't arrive, a settlement that was short, a charge you didn't expect. Do it daily for busy accounts and at least monthly for quiet ones.
Reconciliation is fastest when every flow carries a reference you can match: virtual account numbers for customer transfers, settlement references for provider payouts, bank references (UTR) for your own payments. Where statements can flow directly into your accounting system, most of the matching can happen before anyone looks.
Daily
Check the closing balance against yesterday's plus today's expected movements.
Monthly
Every statement line matched to your books; bank charges and interest recorded.
On exceptions
Anything unmatched has an owner and a date to resolve it.
Connecting statements to your systems: API banking. Matching across providers: reconciliation.
Cash, cheques and the branch
Digital rails carry most business payments now, but many businesses still take cash over the counter and receive cheques from customers who prefer them. A current account is where both end up, and each has its own rhythm.
Cash deposits usually carry charges above a free limit, and the limits and fees vary by bank and account type. Cheques take time to clear, and a cheque that bounces comes back as a return with a reason, so money from a cheque shouldn't be treated as available until it has cleared. For outgoing cheques, the account needs enough balance when the cheque is presented, not when it was written.
If your business handles a lot of cash or cheques, ask about deposit limits, pickup services and clearing times before choosing the account, since these are where charges and delays add up.
Cash in
Deposit limits and charges above a free threshold differ by bank; count and bank cash promptly so it isn't held at the shop.
Cheques in
Treat funds as available only once cleared; returns come back with a reason code you can act on.
Cheques out
Keep enough balance for when the cheque is presented; record cheque numbers so the statement matches.
Demand drafts
Still requested by some government bodies and landlords; the bank debits the account when it issues one.
A month-end on a current account
Month-end is where the account and the books have to agree. A short, repeatable routine keeps it to hours rather than days, and the same routine works whether you have one account or five.
- Step 1
Download the statement
Every account, for the full month, from the bank rather than a spreadsheet someone kept.
- Step 2
Match every line
Customer receipts to invoices, payments to bills, settlements to provider reports.
- Step 3
Record bank charges and interest
They're easy to miss and they're on the statement, not on any invoice.
- Step 4
Chase what's unmatched
An unexplained credit may be a customer who paid without a reference; an unexplained debit needs a question to the bank.
- Step 5
Review signatories and limits
Anyone who left this month should already be removed; confirm it.
- Step 6
Check the balance forecast
Next month's payroll, taxes and big supplier payments against expected collections.
Mistakes that cost businesses later
Running the business through a personal account. It mixes money that should be separate, makes accounts and tax filings harder, and customers may hesitate to pay an individual's name.
One signatory with no limits. Convenient until that person is unavailable, leaves, or makes a mistake no one else saw. Set limits and a second approver for large payments.
Not updating the bank when people change. Former employees with online banking access, or a signatory list that's years out of date, are both avoidable risks.
Ignoring minimum balance charges. Small monthly charges on a quiet account add up; close accounts you no longer use, properly, through the bank.
No reference on incoming payments. When customers pay without a reference, every receipt becomes a manual search. Give each customer a way to be identified.
Moving to a new bank without missing a payment
Businesses change banks for better service, lower charges or features the old bank can't offer. The risk isn't the new account; it's the payments still pointed at the old one. Customers keep paying into it, mandates keep debiting it, and providers keep settling to it until each is told otherwise.
Run both accounts side by side for a few months. Keep enough in the old one to cover anything still due, and close it only when a full cycle of statements shows nothing new arriving or leaving.
- 1List every flowWho pays in, who debits the account, which providers settle to it, which payments go out.
- 2Open and test the new accountSignatories, online banking roles and limits working before anything moves.
- 3Move settlements and payroll firstThen supplier payments, then mandates, which need re-registering.
- 4Tell customersNew details on invoices and payment pages, and a note to regular payers.
- 5Watch the old accountAnything still arriving shows who hasn't been told.
- 6Close properlyThrough the bank, once a full cycle shows no activity.
Choosing a bank: questions worth asking
Most current accounts look alike on a brochure. The differences show up in daily use: how easy it is to add a signatory, what a bulk payment costs, whether statements can be pulled by software, and who answers the phone when a large payment is stuck.
- 1What are the minimum balance, charges per transaction and charges for bulk payments?
- 2How do online banking roles, limits and approvals work for businesses?
- 3Can statements and transfers be connected to our systems, and how?
- 4How are signatories added or changed, and how long does it take?
- 5Who do we contact when a high-value payment is delayed?
- 6What credit facilities could be attached later, and on what basis?
Keeping the account safe
Business accounts are targeted precisely because they hold more money and move it more often. Most losses don't come from hacking the bank; they come from someone inside or outside the business getting a payment approved that shouldn't have been.
New payees need a second person
Adding a beneficiary is where most fraud starts.
Limits per person and per day
So one compromised login can't empty the account.
Alerts to more than one person
Large debits and new payees notify a second person.
Remove leavers the same day
Signatories and online access, both.
Where Peneu fits
Current accounts are opened and held by banks. Peneu's role is around the account: collecting payments that settle into it, sending payouts from it, and bringing its flows together for reconciliation. Which banks Peneu connects to, and whether Peneu can help you open an account through a partner bank, is confirmed during onboarding.
Current account questions
What is a current account?
A bank account designed for a business's day-to-day transactions: collections from customers, payments to suppliers and staff, taxes and transfers. It's built for frequent movement of money rather than for saving, and it's opened in the name of the business.
How is a current account different from a savings account?
A savings account is meant for individuals to keep and grow savings. A current account is meant for business transactions: it usually supports many more transactions, business-oriented features like overdrafts and multiple signatories, and it's the account a business's customers and suppliers expect to deal with. Interest, charges and minimum balances vary by bank and account type.
What does a business need to open a current account?
The bank verifies the business and the people authorised to operate the account. That usually means registration documents, the business's PAN and GST registration where applicable, the identity of directors, partners or the proprietor, and a document authorising who may sign. The exact list is set by each bank under its KYC rules.
Can a current account have more than one signatory?
Yes. The operating instructions, set when the account is opened, say who may operate it and how: for example any one director alone, or any two jointly above a certain amount. Online banking usually mirrors this with maker and checker roles.
What is an overdraft on a current account?
A limit, sanctioned by the bank after its own assessment, that lets the account go below zero up to an agreed amount. Interest is charged on the amount actually used. It isn't automatic; it's a credit facility the bank decides on and reviews.
Should a business have more than one current account?
Often it helps: one account for collections, one for payouts or payroll, or accounts at two banks for resilience. Separate accounts make each flow easier to reconcile and to control, at the cost of moving money between them.
Can I connect a current account to my software?
Many banks offer API access or statement feeds for business accounts, so balances, statements and transfers can flow into accounting and ERP systems. See the API banking guide for how that works and how to keep it safe.
How long does it take to open a current account?
It depends on the bank, the type of business and how complete the documents are. A sole proprietorship with everything in order can be quick; a company with several signatories and beneficial owners to verify takes longer. Ask the bank for its list up front and send everything together.
Can a sole proprietor open a current account?
Yes. The account is opened in the proprietor's name for the business, and the bank asks for proof that the business exists, such as a registration or tax document, alongside the proprietor's own KYC. Which documents count is set by each bank.
Does Peneu open current accounts?
Current accounts are opened and held by banks. Which banks' accounts Peneu connects to, and whether Peneu helps with opening one through a partner bank, is confirmed during onboarding. Nothing on this page should be read as Peneu offering bank accounts itself.
Official sources
Last reviewed . Examples, amounts and screens marked illustrative are not Peneu figures.