A current aws accounts buy is one of the many types of accounts offered by a bank. Although it pays negligible (if at all) interest to the account holder on the balance maintained, a bank current account offers the flexibility to make unlimited withdrawals and deposits in a day, every day. It is therefore ideal for businessmen, firms, companies, private entities, and individuals who are involved in numerous transactions on a daily basis. This account is majorly operated through cheques, although some account holders may also prefer to use a debit/credit card to carry out transactions these days.
A business current account is neither meant to earn interest nor to encourage any savings. It is purely used for the convenience it offers in business transactions. The initial deposit/minimum balance requirement of a current account held in a bank is quite high as compared to a savings account. One major advantage of opening this account with a bank is the overdraft facility which ensures that nothing hampers one’s everyday transactions even if there is a shortfall of cash in the account. The overdraft facility works on a mutual understanding that even though an account holder might not have money in his account at the time of withdrawal, his business ensures that at the day’s end, the income it generates will pay off the overdraft.
A current account is also extremely useful to make regular payments at regular intervals of time (wages, rentals, etc.) without any hassles. An account holder has the liberty to issue standing instructions to the bank to ensure that timely payments are made directly to the receiving party’s account. Where the payment amounts are not fixed, the account holder may also choose the direct debit option where he instructs the bank to pay the intended person just that once.
As none of the banks that offer a current account facility can entice customers with “competitive interest rates” as they do in a savings account, it is usually the services offered on this accounts that are highlighted in their promotions. And there being no free lunches – especially in banks – these services are more often charged, than not.