Features of Current Bank Account

Features of Current Bank Account

 

The main features of current account are as follows:-

Current bank accounts are operated to run a business.

It is a non-interest bearing bank account.

It needs a higher minimum balance to be maintained as compared to the savings account.

Penalty is charged if minimum balance is not maintained in the current account.

It charges interest on the short-term funds borrowed from the bank.

It is of a continuing nature as there is no fixed period to hold a current account.

It does not promote saving habits with its account holders.

Banker requires KYC (Know your Customers) norms to be completed before opening a current account.

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 number and amount of withdrawals made, as long as the current account holder has funds in his bank account.

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

square Advantage of Current Bank Account ↓

The advantages of current account are as follows:-

Current account is mainly opened for businessmen such as proprietors, partnership firms, public and private companies, trust, association of persons, etc. that has a large number of daily banking transactions, i.e. receipts and/or payments.

It enables businessmen to carry out their business transactions properly and promptly.

The businessmen can withdraw from their current accounts without any limit, subject to banking cash transaction tax, if any levied by the government.

Home branch is that location where one opens his bank account. There are no restrictions on deposits made in the current account opened in a home branch of a bank. However, the current account holder