Business people who do many regular transactions with the bank open a current bank account. Deposits, withdrawals, and counter transactions are all included. Demand Deposit Account is another name for it. In both cooperative and commercial banks, a current account can be opened. Amounts can be placed and withdrawn at any moment without notification in an existing account. It can also be used to make payments to creditors via checks. Customers’ reviews can be deposited in this account and collected later.
A Current account in India can be created with a deposit of Rs.5000 to Rs.25,000. Customers can withdraw funds using checks, and they often do not receive any interest. Current account holders do not receive interest on their balance in the bank’s existing account. Current account holders benefit from the overdraft facility in one significant way.
Characteristics of a Current Account
The following are the main characteristics of a current account:-
- To run a firm, current bank accounts are used.
- It’s a bank account that doesn’t pay interest.
- Compared to a savings account, it requires a more considerable minimum amount to be maintained.
- A penalty is imposed if the current account’s minimum balance is not maintained.
- It charges interest on monies borrowed from the bank for a limited period.
- It is continual because a current account is not held for a set time.
- It does not encourage its account customers to save money.
- Before creating a current account, the banker demands that KYC (Know Your Customer) procedures be followed.
- The primary goal of a current bank account is to allow businesspeople to execute transactions.
The Benefits of a Current Bank Account
The following are the benefits of a current account:-
- An existing account is typically opened by businesspeople who have many daily banking transactions, such as receipts and payments, such as proprietors, partnership firms, public and private companies, trusts, associations of persons, etc.
- It helps business people to conduct their transactions in a professional and timely manner.
- People in business can make unlimited withdrawals from their current accounts, subject to any banking cash transaction tax imposed by the government.
- A person’s home branch is where they open a bank account. Deposits made in a current version opened in a bank’s home branch are not subject to any restrictions. On the other hand, the current account holder can deposit cash at any branch.
- It allows a bank to collect funds on behalf of its customers and deposit them into their current accounts.
- It allows the current account holder to get an overdraft (short-term borrowing) facility.
- Through an inter-bank connection, creditors of the account holder can obtain credit-worthiness information on the account holder.
- It helps the country’s industrial development. Business people would struggle to run their firms if it weren’t for it.
- Money (cash) can be deposited and withdrawn at any time and from any location.
Do you know about Digital Current Account?
The Digital Current Account is a zero-balance account explicitly built for developing enterprises, and it offers a variety of digital business solutions to meet their needs. The account allows you access to online banking 24 hours a day, seven days a week, with enhanced features such as virtual accounts, a payment gateway, and earning interest on your hard-earned money.
