Complete guide to cash deposit limit in a Current Account

Current Accounts play a vital role in the smooth functioning of your business. For instance, an important feature of Current Account is that they enable higher cash deposit limits than Savings Accounts. A higher cash deposit limit is an asset for any business, especially, as the business starts to scale.

However, the cash deposit limit of your Current Account must align with the volume and value of real-time financial transactions of your business. Hence, Current Account selection is a strategic decision in transactional banking. Be sure to do your research carefully when choosing the right Current Account product for your business needs.

What is the cash deposit limit in Current Account per day?

The cash deposit limit of a Current Account is the upper cap on the value of account funding allowed within 24 hours.

Cash deposit policies are governed by several factors as follows:

• The Reserve Bank of India guidelines mandate that banks must report cash deposits exceeding ₹50 lakh to the Income Tax department. However, this does not mean that account holders cannot deposit a figure over this amount. It just means that cash deposits, account liquidity, cash handling and account funding methods may attract scrutiny by the IT department.
• Banks usually keep a cap on the Current Account deposit limit per month rather than the Current Account cash deposit limit per year or day.
• Banks may set the monthly free Current Account cash deposit limit between ₹2 lakh and ₹3 crore as per the needs of businesses. However, premium banking services attract cash deposit fees for larger cash deposit limits.

Types of Current Accounts and their cash deposit limits

It is important to choose a Current Account with the right cash deposit limit that supports your business. If the cash deposit limit is too low, you will be unable to receive funds in your account. If it is too high, then you may end up paying extra charges for no reason. Hence, you must familiarise yourself with the various cash limits allowed. Then choose a Current Account with a cash deposit limit that aligns with the monthly cash flows of your business.

Here is a snapshot of Current Accounts and their cash deposit limits.

Normal Current Account

• This account is suitable for businesses such as retailers and Small and Medium Enterprises (SMEs) for whom banking transaction amounts are of a lower ticket size.
• Axis Bank’s Current Account – Normal have monthly cash deposit limit of ₹2 lakh.

Zero balance Current Account

• A zero Current Account balance is ideal for new start-ups.
• For instance, Axis Bank’s Current Account – New Economic Group has a free cash deposit limit of 10 times the monthly average balance (MAB).
• Account holders can make cash deposits of up to ₹50 lakh.

Current Account for Arthiyas

• This account, tailored to the needs of commission agents in the agriculture sector, has a low MAB of ₹5,000.
• It has a free monthly cash deposit limit of 10 times the MAB i.e. ₹50,000.
• The monthly cash deposit limit is capped at ₹75 lakh.

Current Account for trusts

• This is a zero balance Current Account ideal for trusts and societies.
• This account has a cash deposit limit of up to 8 times the MAB.
• Account holders can make cash deposits of up to ₹1 crore.

Advantage Current Account

• This account, suitable for the needs of retailers, wholesalers, and MSMEs, has a higher MAB of ₹25,000.
• It has a free monthly cash deposit limit of 10 times the MAB.
• Monthly cash deposit limits are capped at ₹25 lakh.

Current Account for jewellers

• This unique account is especially tailored to the needs of jewellery businesses and has an MAB of ₹25,000.
• It has a free monthly cash deposit limit of 8 times the MAB.
• The monthly cash deposit limit is capped at ₹2 crore.

Premium Current Account

• This account, serving the needs of large firms and mid-corporates, has an MAB of ₹5 lakh.
• It has a free monthly cash deposit limit of 10 times the MAB.
• The monthly cash deposit limit is capped at ₹3 crore.

Current Account for large private and public sector businesses

• This account, designed to service the needs of large distributors, manufacturers and service providers, has a MAB requirement of ₹10 lakh.
• It has a monthly cash deposit limit of ₹1 to ₹2 crore.

Current Account for corporations

• This account category serves large corporations and multi-national companies and requires an average quarterly balance of ₹5 lakh.
• It has a monthly cash deposit limit of ₹2 crore.

Current Account for global business

• This account category serves trade and Forex customers, importers and exporters, and the average quarterly balance requirement is NIL.
• It has a cash deposit limit of 8 times the MAB, subject to a maximum value of ₹1 crore.

Charges for Current Account cash deposit processing

The charges vary between ₹3 and ₹5 per ₹1,000, once the deposit value crosses the specified cash infusion into the Current Account limit.

Suppose you own a mid-size corporation with a premium Current Account. For a cash deposit transaction above ₹60 lakh, you will be charged a fee at the rate of ₹4 per ₹1,000 and ₹5 per ₹1,000, for transactions that exceed the cash deposit limit by up to and beyond ₹50 lakh, respectively.

Also Read: Complete guide to opening a Current Account

Conclusion

The cash deposit limit of a Current Account is one of the most important features of your account. This feature enables cash deposits in your account from revenue, interest and other sources. Hence, choose your Current Account and associated cash deposit limit as per the real-time banking transactions needs of your business.

Axis Banks offers a range of Current Account products that serve the needs of diverse business entities. Reap the benefits of seamless digital onboarding, overdraft facilities, cash deposit limits as per business needs, business Debit Cards, deposit security, superior payment solutions, unlimited NEFT / RTGS online transactions, global transactions, and Forex services.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.