| A current account is a service provided by financial institutions which allows bank customers - both individuals and businesses - to deposit money and withdraw funds from a bank account at any time. Different banks and other financial institutions use different definitions for a current account, but generally current account holders can use personal cheques instead of cash to pay off debts. Electronic debit cards or cash machine cards can also be used to access individual accounts or withdraw cash.
Most banks offer some form of current account service. Some may require a minimum initial credit before opening a new account, alongside proof of identification and address. A student or other low-income applicant may establish a no-frills current account where personal cheques and other services are free. Other clients may benefit from interest payments, providing they maintain a high minimal balance each month.
Typically, a current account is managed through thorough posting of deposits and withdrawals. The account holder is supplied with official cheques which comprise all of the necessary routing and mailing information. When a cheque is filled out correctly, 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 amount to be debited from the cheque writer's account.
Holders of current accounts are responsible for keeping track of their account balance, although the financial institution will regularly issue its own accounting statements. Cheques must represent an actual sum contained in the current account itself. If a cheque is written for an amount of money higher than the available balance, the cheque writer faces countless fees and possible legal fulfil. The recipient of the bad cheque can demand prompt cash payment for the original debt and a fee for the returned cheque. Some financial institutions will protect current account holders by making the proper payments and informing the cheque writer that an overdraft has taken place. Frequently the bank will reimburse their losses by charging for services provided, so it pays to avoid writing cheques when the balance is unknown.
For additional information on current accounts, visit www.checkingaccount.ca. |
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