A current account is a banking account where a lot of monetary transactions of higher amounts can be carried out without incurring charges for it. It is mostly recommended for businesses as opposed to a savings account, which is mostly used by individuals for their banking needs.
But have you ever wondered why exactly is a current account used by these businesses, no matter how small or big they may be? For starters, let us have a look at what the needs of an individual are as opposed to a business. Individuals may need only a certain amount of money for their day-to-day activities and hence the transactions done by them may not be as significantly huge as that done many businesses. A current account offers businesses lucrative deals and helps them to facilitate their financial transactions with great ease. It is ideal for higher number of transactions and can also be customized as per your specific requirements. There are varied benefits and value-based services associated with a current account. What’s more is that a business can also avail various schemes based on your bank for your current account, wherein you can choose superior offerings by the banks instead of a normal current account.
Businesses choose current accounts to avail facilities that may not be available in personal banking. Highly used services like request for overdrafts, demand drafts, duplicate current account statements, etc. fall under the chargeable category in most Indian banks. Nominal amount is also charged when a cheque bounces or in case of outstation cheque collection through your bank’s branch. NEFT and RTGS transactions are also charged in most cases if you are making these through your bank via offline mode. While benefits are available in all types of banking, a current account may have a host of many other benefits and specialized services due to the nature and need of a business.
Current accounts sometimes have lower interest rates than that provided for personal banking, which is helpful for taking loans of significant amounts.
One must also note that current accounts are also liable to service charges that are levied by the banks. Charges for a current account are way higher than a normal account used for personal banking. These charges may prove a burden if you do not make sure you’re availing only those services which are essential for you.
The best part of opening a current account in recent times is the fact that you do not have to visit the bank at all! You can simply get it done through your mobile phone or a computer.
In all, current accounts are used to facilitate high number of bank transactions which may be higher in monetary value. This is specifically beneficial to businesses, and current accounts are also synonymous with corporate banking meant largely for corporate entities that require specialized services based on their business needs.
Disclaimer: The above information is subjective and generic in nature. Services provided and charges levied may vary from bank to bank.