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 ?