What is a current account?
Businessmen in India have to carry out a number of transactions. They deposit and withdraw money on many occasions. To serve this purpose they open a current account. Businessmen cannot open saving account as it has a fixed number of withdrawals but in a current account there is no such transaction limit.
Current account is not meant for the purpose of earning interest or for savings, it is meant purely for business transactions, hence there is no interest paid on it. Banks also generally demand a higher minimum balance in a current account as compared to savings account.
The greatest advantage of a current account is the overdraft facility which can be availed by the current account holder.
Current account is not meant for the purpose of earning interest or for savings, it is meant purely for business transactions, hence there is no interest paid on it. Banks also generally demand a higher minimum balance in a current account as compared to savings account.
The greatest advantage of a current account is the overdraft facility which can be availed by the current account holder.
Features of a current account:
Unlimited withdrawals:
There are no limits on withdrawals and deposits in current account, Businessman can make transactions many times in a day or month.
Basic facilities:
The common facilities of cheque book, ATM/Debit card are provided by banks.
Overdraft facility:
Overdraft facility enables the current account holder to withdraw more money than they have in their account up to an agreed limit. This is more like a short-term borrowing.
Online and phone banking:
Lenders willingly lend you money, if you have a current account. Having a current account acts as a guarantee that you have money to run a business.
Provides creditworthiness:
Lenders willingly lend you money, if you have a current account. Having a current account acts as a guarantee that you have money to run a business.