| A current account is a service provided by banks and other financial institutions which enables bank clients to deposit money and take it out from a federally-shielded account at any time. The definitions "current account" may vary from bank to bank, but generally current account holders can pay off debts using personal checks instead of cash. Cash machine cards and electronic debit cards can also be used to access an account or make cash withdrawals.
Nearly every bank renders some type of current account service for their customers. Some may require a minimum initial deposit before establishing a new account, along with proof of identification and address. Low-income applicants may opt for a no-frills current account which provides free use of personal cheques and other services. Others may gain benefit from interest rate payments by maintaining a high minimum balance monthly.
Commonly, a current account is handled through careful posting of credits and debits. The account holder is supplied with official cheques with the required routing and posting information. When a cheque is filled out appropriately, the recipient can deposit it into his or her own bank account. A bank worker then files the cheque electronically and the cheque writer's bank receives the cancelled cheque and sum to be taken out from the cheque writer's account.
Current account owners are responsible for keeping track of their available funds, although the bank will regularly make its own accounting statements. Cheques must represent an actual amount contained in the current account itself. If a cheque is written for a sum of money higher than the available balance, the cheque writer will be charged numerous fees. The recipient of the bad cheque can demand prompt cash payment for the original debt as well as a fee for the returned cheque. Some banks will protect current account owners by making the appropriate payments and notifying the cheque writer that an overdraft has taken place. Frequently the bank will reimburse their losses by charging for services provided, so it is better to avoid writing cheques when the balance is unknown.
For additional information about current accounts, please visit www.checkingaccount.ca. |
Article Details
