| A current account is a bank account which enables bank customers - both individuals and businesses - to make a deposit and debit funds from a federally-protected account at any time. The definitions of a current account may differ, but in general 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 an account or make cash withdrawals.
Nearly every bank offers some form of current account service. Some may require a minimum initial deposit before establishing a new account. Low-income customers may decide on a no-frills current account which does not charge fees for the use of personal cheques and other services. Other customers may benefit from interest rate payments, provided that they sustain a high minimal balance monthly.
Normally, a current account is handled through careful posting of credits and debits. The account holder has got a supply of official cheques which contain all of the required routing and posting information. When a cheque is completed appropriately, the recipient treats it the same as cash and completes the transaction. As soon as the recipient deposits the cheque into his or her bank account, a bank employee 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.
Current account holders are responsible for keeping track of their balance, even though the bank will routinely issue its own accounting statements. Cheques must represent an actual sum contained in the current account itself. If a cheque is written for a sum of money higher than the available funds, the cheque writer will be charged numerous fees. The recipient of the bad cheque can demand immediate cash payment for the original debt as well as a fee for the returned cheque. Some financial institutions will protect current account owners by making the appropriate payments and informing the cheque writer about the overdraft. Most often the bank will recover their losses by charging for services offered, so it is better not to write cheques when the balance is unknown.
For detailed information on current accounts, visit www.checkingaccount.ca. |
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