What is the meaning of Current Bank Account?
- Generally current bank account is opened by businessmen, because businessmen regular make higher number of transactions with bank.
- It includes deposits, withdrawals and contra transactions.
- Current account is also known as Demand Deposit Account.
- One can open current account in co-operative bank and commercial bank.
- Current account holder can deposit or withdraw at any time without giving any notice.
- It is suitable for making payments to creditors using cheque.
- One can also deposit cheque in this account received from customers.
- Current account holders do not receive any interest on the balance lying in current account with the bank.
- Overdraft facility is available for current account holder.
Features of Current Bank Account:
- Generally, current bank account is operated to run a business.
- Current account is a non-interest bearing account. No interest is payable on the balance amount in this account.
- Minimum balance to be maintained in current account varies bank to bank. But it is higher than the saving bank account.
- Penalty is charged if minimum balance is not maintained in current account.
- The main objective of current bank account is to enable the businessmen to conduct their business transactions smoothly.
- There is no restriction on the number and amount of deposits and withdrawals, but the account holder must have the balance in his account.
Advantages of Current Bank Account
- Current account is mainly for businessmen like proprietors, partnership firms, public and private companies, trust, association of persons etc. such businessmen make large transactions daily.
- It helps businessmen to make a direct payment to their creditors by issuing cheques, demand drafts etc.
- The creditors of account holder can get creditworthiness information of the account holder through interbank connection
- It has a very big contribution in industrial progress of the country. In the absence of current account businessmen would face difficulties in running their business.
- It also has the facility of internet-banking and mobile-banking to carry out important business transactions with ease and quickly.
- It also has various other advantages as following –
- Deposit and withdrawal of money at any location.
- Account holder can make multi-location fund transfer.
- Electronic fund transfer facility is also available.
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