Current accounts are famous among firms, companies, and enterprises that want to handle several transactions daily. The current account provides the best facilities to make deposits, withdrawals, and no-limit transactions without hassles.
This type of account is known as a demand deposit account. Keep reading the whole post to know about the digital current account, from its meaning to its benefits and drawbacks.
Digital current account
Current accounts are the most preferred account among business, firms, and public enterprises, that generally wants to handle the number of transactions with the bank.
It is zero interest accounts that are associated with huge transactions regularly. Due to the account’s fluidity, they never earn the interest. They do not carry any limit on transactions that they make.
They do not charge any fees to make the transactions through the current account within the business.
Pros of having a current account
There are many benefits due to which businesses and individuals prefer to open a current account.
- Current accounts are perfect to handles large payments and the number of receipts.
- Under the current account, unlimited withdrawals are permitted in line with applied cash transaction fees.
- No limitations are applied to deposits made into a current account opened at a bank branch. Moreover, the account holders deposit cash at other units by paying small applicable fees.
- Pay orders, cheques, and demand drafts are issued through the current account to make direct payments to creditors.
- Additional facilities like overdraft facilities are also provided to account holders.
- The features of short interest on earnings make the current account option more attractive for people.
- Businesses get more benefits with additional benefits, like withdrawals and deposits from any location, at any time.
- The business also withdraws from the current account without any restrictions levied by the government.
- It guides the creditors of the account holder who get access to creditworthiness information via the inter-bank connection.
Drawbacks of current account
If you want to open your current account, you should be aware of the benefits and drawbacks. So let us look at the disadvantages of current accounts now.
- There is a chance of losing an interest rate because of zero or low interest on money held in your current account.
- An operational burden is also attached to account packages since it provides the services to account holders at an additional cost.
- The fine print services and paperwork are more confusing and lengthier. So, it may also become frustrating when people try to open their current accounts.
- Huge fees because of corporate transactions within the business
- There are no restrictions possessed on the fund’s amount that is withdrawn in a day
A current account carries more benefits for business than drawbacks. But for any person or company with a current account, it is essential to properly know about all advantages and disadvantages.