What is the Current Account?
Current bank accounts are really important for organisations, companies, public enterprises, and beyond who usually deal with a massive amount of daily transactions. Just like the savings account, the current account involves withdrawals and deposits. However, it has a larger limit of transactions.
Today, any commercial bank can easily open a current account for you. Banks have begun to entice individuals and companies by offering various schemes and offers. You can go ahead with the bank you think is most suitable for your business.
You should be aware that current accounts do not earn interest because of their fluidity. You, however, may make as many transactions as you wish with this sort of account.
What are the advantages of a current account?
Currently, the primary reason for opening a current accounts is that they allow a lot of money transfers—deposits and withdrawals, unlike savings accounts. According to the cash transaction fees, an unlimited number of withdrawals are permitted. However, there are no restrictions on the deposits made at a bank’s home branch. Individuals may also make cash deposits at other branches for a modest fee. To make seamless direct payments to the creditors, current accounts provide cheques, demand drafts, and demand drafts to you. Some current accounts now offer little interest for deposits. This makes the current account more beneficial. Your company or organisation can receive free inward remittances, multi-location transfers, convenient and easy deposits and withdrawals, and withdrawals from a location closer to you. Furthermore, there is no limit on the amount of money you may withdraw from your current account.
However, you need to know that cash transaction tax is applied by the government on the amount.
Creditors can assess your creditworthiness as a current account holder through connections. You can make thorough use of Internet banking and mobile banking to make transactions faster and smoother.
You can also enjoy depositing and withdrawing cash from any location and benefit from multi-location fund transfers.
What are the disadvantages of having a current account?
Even though the account is fluid, it does not provide good interest rates, so you miss out on the chance to gain interest. These accounts charge more fees than regular savings accounts. To open an account, you must go through a long and tiring KYC process. When you’re conducting business activities, there are a lot of fees to keep in mind. Additionally, you must maintain a much higher minimum balance than you would in a standard savings account. If your account has a negative balance, there may be a number of penalties assessed. As a result, ensure that your account does not have a negative balance. You now know the advantages and disadvantages of a current account. You may now make an intelligent decision before opening your new current account!