Meaning of Current Bank Account

Current bank account is opened by businessmen who have a number of regular transactions with the bank, both deposits and withdrawals. It is also known as Demand Deposit. Current account can be opened in co-operative bank and commercial bank. In current account, amount can be deposited and withdrawn at any time without giving any notice. It is also suitable for making payments to creditors by using cheques. Cheques received from customers can be deposited in this account for collection. In India, current account can be opened by depositing Rs.500 (US $ 11) to Rs.1,000 (US $ 22). The customers are allowed to withdraw the amount with cheques and they generally do not get any interest. In India Co-operative bank may allow interest upto 1%. Current account holder get one important advantage of overdraft facility.

Features of Current Bank Account

The main features of current account are as follows:1. The main objective of current bank account is to enable the businessmen to conduct their business transactions smoothly. 2. There is no restriction on the number and amount of deposits. There is also no restriction on the withdrawals. 3. Generally bank does not pay any interest on current account. Nowadays, some banks do pay interest on current accounts. 4. Current account is of continuing nature and as such there is no fixed period.

Advantage of Current Bank Account

The advantages of current account are as follows:1. Current account enables businessmen to conduct his business transactions smoothly. 2. The businessmen can withdraw any amount at any time from their current accounts. There are also no restrictions on withdrawals. 3. The businessmen can make direct payment to their creditors with the help of cheques. 4. The bank collects money on behalf of its customers and credits the same to their accounts. 5. Current account enables the account holder to obtain overdraft facility. 6. The creditors of the account holder can get credit-worthiness information of the account holder through inter bank connection. 7. Current account facilitates the industrial progress of the country. Without the help of this account, businessmen would have difficulties in running their business.