The Features And Advantages Of Current Account In A Bank

By Author: Kirthy Shetty
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Banks are the only financial aid for many, may it be individuals or for companies for trade. Some accounts provide interest and accordingly some can have high interest rates and some can have the least expected interest rates and some of the accounts do not give any kind of returns mainly the accounts like the current account.

Currents account is basically used by business men for trade who have a number of regular transactions with the bank, both deposits and withdrawals. Currents Account is the sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). The balance of trade is typically the most important part of the current account. This means that changes in the patterns of trade are key drivers in the current accounts of most of the world's economies.

Current account can be opened in both co-operative bank and commercial bank. In current account, amount can be deposited and withdrawn at any time without giving any notice. It is also suitable for making payments to creditors by using cheques. ...
... Cheques received from customers can be deposited in this account for collection. Current account holder gets one important advantage and that is of overdraft facility. Current account facilitates the industrial progress of the country. Without the help of this account, businessmen would have difficulties in running their business.

The main features of current account are:
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. There is also no restriction on the withdrawals as it’s of continuing nature and as such there is no fixed period.

Generally bank does not pay any interest on current account. Nowadays, some banks do pay interest on current accounts too.

The advantages of having a Current account are:
Current account enables businessmen to conduct his business transactions smoothly allowing them to withdraw any amount at any time from their current accounts. There are also no restrictions on withdrawals.

The bank collects money on behalf of its customers and credits the same to their accounts. The businessmen can make direct payment to their creditors with the help of cheques.

The creditors of the account holder can get credit-worthiness information of the account holder through inter-bank connection.

Current account enables the account holder to obtain overdraft facility too.

Having a currents account is a must for every businessmen for smooth transactions facilitating the industrial growth of the country. Because exports generate positive net sales, and because the trade balance is typically the largest component of the current account, a current account surplus is usually associated with positive net exports.

Shilpika Ponnappa,
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