Basics of current account- Meaning, Pros, and cons you must know.

Basics of current account- Meaning, Pros, and cons you must know.


Current accounts are popular bank accounts among companies, businesses, or large enterprises, that want to carry a high number of transactions daily. The current account consists of withdrawals, deposits, and contra transactions facilities.

We can also call the current account a demand deposit account. Read the complete article to know the brief of the current account.

What is a current bank account?

Current bank accounts are the preferred account option for businesses. It helps the business to make frequent deposits, withdrawals, and transactions in a day without any hassles. You can easily open your current through any commercial bank. It is associated with a high number of transactions daily.

Remember that the current account does not give you the option to earn interest on your deposits due to its fluid nature. The best thing is that the current account does not possess any limits on transactions to be made by account holders.

Advantages of current account

  • Current accounts can handle many payments or receipts systematically.
  • Under the current account, limitless withdrawals are allowed to make in line with the applicable cash transaction fees.
  • There are no limits applied on deposits to be made in the current account from any one of the bank branches. Also, the account holders can easily deposit cash at other branches of the bank by paying small fees.
  • Pay orders, cheques, and demand drafts are issued by the digital current account to make direct payments to creditors.
  • The overdraft facilities are available for current account holders.
  • The small interest-earning presence on the current account balance makes this account attractive for users.
  • Businesses can also get additional benefits in the form of free deposits, withdrawals, remittances, multi-location transfers, etc., at your convenience.
  • The business can easily withdraw their current account without any restrictions, subject to cash banking transaction tax levied by the government.
  • It ensures the industrial progress of the country. Without the help, the business will face difficulties in running the business.
  • It offers mobile banking and internet banking to allow the business to carry out important transactions easily.

Disadvantages of current account

  • Due to zero or low-interest rates on funds in current accounts, there is a risk of losing the interest rate.
  • There is an operational burden attached to the current account because it provides the same services at an additional cost.
  • The fine print and paperwork make it a confusing and lengthy process that frustrates the account holders.
  • If you made corporate business transactions, then there is a high transaction fee levied on the current account.
  • There is a restriction on the number of funds that are withdrawn in a day


A current account is a significant necessity for all business types. It is worthwhile to open a current account because there are far more advantages to having one than disadvantages.


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