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Features and Benefits of Having a Current Account

A current account attaches zero-interest and there is usually no cap on the number of financial transactions that can be made each day.

Updated:March 20, 2019, 9:36 PM IST

A current account is typically popular among firms, public enterprises, businesses and companies that conduct financial transactions with banks on a regular basis. Also known as a demand deposit account (in the banking parlance), a current account includes withdrawals, deposits and contra transactions as well.

A current account attaches zero-interest and there is usually no cap on the number of financial transactions that can be made each day.

That being said, it is important to acquaint yourself with some of the key features and benefits that a current account entails. Here are a few;

• A current account allows you to systematically handle large volumes of payments and receipts on a regular basis.

• This type of account helps you manage your finances efficiently, by separating business related transactions from personal. In case you are self-employed, you can benefit in the form of credit appraisal at the time of applying for a business loan.

• There is no limit on the number of withdrawals that you wish to make in a day.

• Considering it is the home branch, a current account doesn’t entail any limit on the number of deposits made every day as well. In case if it is not your home branch, you can still make deposits by paying up a nominal fee.

• With a current account, cheques, demand drafts or pay-orders can be issued in order to pay directly to creditors.

• If you are a current account holder, you would be able to avail an overdraft provision as well. This facility becomes all the more important considering businesses, often, have to deal with a delay in realization of sales that might lead to a gap between cash inflow and outflow. The provision of overdraft assumes much significance by helping business houses overcome the liquidity crunch.

• Businesses can reap big rewards by maintaining a current account - no extra fees charged on inward remittances, provision to make withdrawals and deposits are available across locations coupled with multi-location fund transfer facility.

• Businesses can make multiple withdrawals (without a pre-set limit) from their current accounts unless any cash transaction tax has been levied by the government.

• Inter-bank communication allows creditors (of the current account holder) to have access to and gauge the account holder’s creditworthiness.

• Similar to other types of accounts, a current account allows internet and mobile-banking - a feature that allows account holders to conduct their transactions easily.

• As a current account holder, you would be eligible for a host of value-added services, such as doorstep banking, 24x7 phone banking, interest on current account balance, etc.

• Finally, should you enjoy a good track record with finances and maintain a current account at the same time, you can avail a Bank Guarantee from the bank. A Bank Guarantee becomes particularly useful in case suppliers or vendors demand one as proof of your solvency.

To know more about current bank accounts, click here.

This content has been created in association with SBI.

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