About Current Account
A current account, also known as financial account is a type of deposit account for the users who carry out significantly higher number of transactions with banks on a regular basis. The account is created by the banks on a request by the applicant and is made available for regular and immediate access with the prime objective of the account being to facilitate smooth transactions for businesses. These accounts mostly deal with liquid deposits and offers some wide-ranging customized choices to assist financial transactions. Current accounts also allow withdrawal of funds and make payments to creditors through check facility offered by the bank.
Current accounts do not limit the number of transactions in a day and they do not provide interests. These accounts require a greater minimum balance when compared with the savings account. The greatest advantage of these accounts being that the account holders can easily avail overdraft facility up to an agreed limit. These accounts can be operated by individuals, public and private companies, associations, proprietary concerns, trusts, etc.
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Benefits of Current Account
- It allows for rapid business transactions
- It has no withdrawal limits
- There is no limit on deposits and transactions in the home branch
- It allows its users to make direct payments using demand drafts, cheques and pay orders
- These accounts provide overdraft facility
- These accounts also provide internet banking and mobile banking facilities
Types of Current Account
To match the differential needs of the customers, banks offers various types of current account. A user should be clear regarding the nature of transaction they desire to carry out after opening a current account. Some of the common types of current accounts offered by banks are listed here:
Standard Current Accounts:
It is a non-interest bearing deposit account with a minimum balance requirements and a fixed monthly average balance. It offers with cheque books, debit cards, overdraft facility, etc. Other features like free NEFT and RTGS transactions, SMS banking, internet banking, etc.
Single Column Cash Book:
These are suited for those businesses that do not maintain bank accounts. These accounts usually allow for daily transactions but do not provide features such as overdraft facility. It is a cashbook which holds records for the daily transactions under separate columns for debit and credit.
Packaged Current Accounts:
These accounts offer a lot of privileges to the account holders. It comes with additional features such as medical support, travel insurance, roadside assistance, etc.
Premium Current Accounts:
These accounts provide with exclusive offers and benefits to the users. These accounts deliver a multitude of customized features and generally used by those who carry out higher financial transactions.
Foreign currency accounts:These are for those individuals or businesses that require frequent transactions to be carried out in foreign currencies.
Different Ways of Depositing Cash
A user can deposit cash in their current account using any of the following ways:
- Cheque deposits
- Depositing cash at any of the branches of the bank
- Electronic transfer
- Wire transfer from abroad
Documents Required to Open a Current Account
An applicant need to submit the following documents at the bank for opening a current account:
- Address proof
- PAN card
- ID and residence proof of all partners
- A color photograph of the applicant(s)
- Partnership agreement in case of partnership firms
- Certificate of incorporation and memorandum of association from the companies or trusts
- Cheque from existing savings account for account opening
- Companies should provide address of communication
Different Types of Access Provided by Current Account
For daily cash transactions, the current account can be accessed by the customers using any of the following methods:
Home Branch: A user can visit their home branch for a various banking needs such as cash withdrawals, deposits, financial assistance, etc. After a certain limit of withdrawals or deposits charges may be applicable at the home branch.
Cheque Facility: This is one of the preferable options by many customers even though internet banking is leading over the physical transactions. It is one of the traditional ways of withdrawing cash from current account.
ATMs: Cash can be withdrawn from ATM machine as well without the necessity of visiting a bank branch. ATMs allow the user to withdraw cash even after the normal banking hours, however, the withdrawal limits are low.
Online Banking: Online banking facility allows the user to perform a numerous banking activities such as cash transfer, clearing payments, viewing statements and balances and many more. This is the most preferred methods of accessing a current account mostly because the transactions are possible during the non-banking hours. Nonetheless, online transactions have a limitation beyond which the user will have to use a check for further such transactions.
Phone Banking: Mobile banking facility also helps the users to perform various activities via calls. The users can review their transactions, make payments or check the balance using this facility.
Current Account Frequently Asked Questions (FAQs)
Your age and your income are the primary criteria for the bank to decide your credit eligibility. For instance, a bank would be more willing to a younger person, earning a stable monthly salary. Such profiles have lower risk exposure.
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