All those businessmen who have a greater number of banking transactions regularly with a bank open current bank accounts. These transactions might range from contra transactions, cash deposits and cash withdrawals. A current bank account is also known as Demand deposit account.
One can open a current bank account in commercial banks as well as cooperative banks. One doesn’t even have to give any notice in order to deposit or withdraw cash from one’s current account. Payment initiation to creditors using checks, that too is feasible through a current bank account. When any cheque is obtained from customers, it can be deposited in a current account for collection.
With cash deposits ranging from Rs 5000 to Rs 25000 in a bank, you can open a current account in India. Being a current account customer you will be eligible to make cheque withdrawals from the current account and one more thing worth mentioning is that in a current account the customer will not be paid any interest on the amount that is lying in it.
Lets dig deeper into some of the main characteristics of a current bank account
1. They are most operated to run a business.
2. It is a bank account where the sum lying in it will not accrue any interest
3. The minimum balance that needs to be maintained in a current account is more that what is needed to maintain a savings bank account.
4. We one borrows short-term funds from the bank, ti charges interest.
5. You can continue to own a current bank account as there is no time period for owning a current account. It is ongoing.
6. Before opening a current bank account, you have to do the proper KYC documentation with the bank.
7. The main objective of current bank accounts is the smooth functioning of businesses.
8. Unlike savings bank accounts a current bank account can have as many deposits as possible.
9. No constraint on the number of cash withdrawals made through current bank accounts.
Now let us get to know the good it does to won a current bank account
1. Proprietors, businessmen, firms so on and so forth open current bank accounts for large banking transactions and smooth operations.
2. The withdrawal amount has no cap and hence the withdrawal is limitless unless the government plants to levy some cash withdrawal taxes.
3. When a current account is opened in home branch of a bank, the deposit amount and he number of cash deposits are also limitless.
4. Businessmen can make direct payment by issuing cheques, demand drafts and pay orders.
5. The owner of a current bank account can avail of the short term loan facility
6. With internet banking and phone banking, one can make transactions a cakewalk!