A current account, also known as a financial account, is a type of deposit account which is maintained by individuals who carry out significantly high number of transactions with banks on a regular basis. They are created by a bank on the request of an applicant and are made available for frequent or immediate access. A current account will relate to liquid deposits and it offers a wide range of customized options to help financial dealings. Current accounts allow an individual to make payments to the creditors through the cheque facility offered by a bank.
Generally, a current account does not provide interests and requires a high minimum balance when compared to savings account. The greatest advantage of a current account is that the account holders can easily avail overdraft facility up to an agreed limit. A current account is one of the most important requirements while starting a business. A lot of banks offer a number of attractive offers and benefits on current accounts for matching the diversified needs of businesses.
Some of the features of a current bank account are listed below:
- A current account will allow transactions beyond the scope of a savings account.
- Compared to savings account, current account will require a high minimum balance.
- A current account can be operated by individuals, proprietary concerns, public and private companies, associations, trust etc.
- No type of restrictions on the number of transactions in a day.
- Non-maintenance of the minimum balance can attract penalty charges.
- Like savings account, KYC guidelines are to be followed even for the current accounts.
- One of the main objectives of the current account is to facilitate smooth transactions for businesses.
- Some banks also offer interest rates on a current account as well.
- Current accounts charge interests on short-term funds the account holder has also borrowed from the bank.
A current account will allow prompt business transactions, there is no limit on withdrawals and deposits in the home branch. The accounts enable businessmen to make direct payments using cheques, demand drafts or pay orders. These accounts provider an overdraft facility, internet banking or mobile banking facilities.
There are different ways of accessing the current account. An individual can visit the parent branch for a lot of their banking needs like cash withdrawals, deposits, financial assistance. There may be charges applicable of withdrawals or deposits after a certain limit even at the bank branch. Individual can also make use of the cheque facility or ATMs for withdrawing cash without visiting a branch. Some banks also provide the option of online banking which enables the account holders for performing a wide range of banking activities like cash transfer, clearing payments, viewing statements and balances. This is one of the most preferred methods of accessing a current account as an individual can transact even during non-banking hours. Without having to wait in a long queue and filling out forms, an individual can transfer money from the account in the click of a button.