Current Account

Current Account

In the current account, a customer can withdraw or deposit money any number of times he desires.  a current account is suitable to those persons who either deposit or make payments frequently. It is thus suitable for business people and institutions which have frequent dealings with the bank. Bank permits overdraft facility on the current account. In view of this facility, the banks do not pay any interest on current accounts. Some times, banks charge some amount from the current account holder as fees for the services extended.  A current account is a form of deposit account that allows, among others, payment by way of cheques.

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 WHO CAN OPEN A CURRENT ACCOUNT 

Different banks have different criteria for opening a current account. Generally, banks would only consider the application if the applicant is: - 18 years old or above - not a bankrupt - of sound mind and has the mental and physical capacity to operate the account properly For business owners and professional entities, they must ensure that they are properly registered with the relevant authorities. However, a bank has the discretion to accept or decline an application to open the account.

Opening the current account

The procedure for opening a current account is the same as that of saving bank account. To open a current account, one has to fill up the prescribed application form giving all the information required by the bank.

The applicant must be introduced by a person known to the bank and operating the current account with it. The specimen signature of the person who will operate the account must also be given. After completing all the formalities, the applicant is given an account number to be mentioned at the time of withdrawing money or depositing any amount in the account.

Operating the current account

Unlike saving bank account money can be withdrawn any number of times from this account. Money can also be deposited in the current account as many times as the depositor desires. With the permission of the bank, a depositor can withdraw money in excess of what he has

deposited in the bank. This facility is known as an overdraft facility and is normally granted only to the current account holder. The steps for operating the current account as far as depositing money is concerned is the same as in the case of saving bank account. Similarly, the steps for withdrawing money or making the payment from the account through the issue of cheques is also the same as with saving bank account.

Distinction between Current Account and Saving BankAccount

S. No. Basis of Difference	Current account	Saving bank account
1 Operation of accounts	The current account is mainly opened and operated by business firms and institutions.	Saving  bank account is opened by individual and salaried people.
2 Withdrawals	Deposits and withdrawals can be made frequently. There is no limit to its frequency.	Withdrawal are not permitted as frequent as in case of a current account.
3 Interest	No interest is paid by the bank on such bank account .	Interest is paid on saving though the account. rate of interest happens to be low.
4 Overdraft	Overdraft the facility is available.	No such facility is allowed.
5 Service charges	service charges charges payable.	No. service charges payable.