Can a limited company open a savings bank account ?


Government Officer

I am working in a state government PSU (A Limited company under Companies act 1956) where funds from various departments are also parked. We are maintaining current accounts with 2 banks. Some banks have come up with an offer of opening savings bank accounts with them and are also offering interest rates as much as 6.25 % on the balance funds. The banks with whom I am currently having current accounts are offering a different solution which transfers amount in the current account to sweep in fixed deposits and thereby earning interest @ 6.75%. I am in a dillemma to chose between the options. 

Please guide on : 

1. Can my Company open a savings account where funds of the state government depertments are also parked and routine income and expenditure are also done ? Is it permissible under the RBI act and rules ?

2. Which option is more appropriate in choosing a savings account or a current account with sweep in fixed deposit ?

 
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as per RBI directives, Savings Bank account can also be opened in the name of Government Departments / bodies / agencies in respect of grants / subsidies released for implementation of various programmes / schemes sponsored by Central / State Government. Bank should also keep on their record a copy of the authorization issued by the respective Government departments.

But in your case it is not possible to open Saving Bank account. 

 
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Which option is more appropriate in choosing a savings account or a current account with sweep in fixed deposit ?
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