The current account is a contract between a bank and a client that establishes that the entity will fulfill the payment orders of the person according to the amount of money that has been deposited or the credit that has been agreed. Said account may be opened and managed by one person or by a group of persons; in the latter case, depending on the conditions, all individuals may be authorized to operate.
The owner of a checking account can dispose of the money through an ATM, the teller window or some type of check book (such as a check ). It is possible to discount bills, link payments to the account and charge or pay interest or taxes, for example.
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Checks and cards are the means of payment that are most commonly associated with a checking account. There are two types of card : the credit card (whose summary must be paid at the end of a period: that is, when the customer pays for a product or service with this card, he acquires a debt and does not deliver the money immediately) and the debit card (the money is automatically subtracted from the client’s funds).
Each bank has its requirements for opening a checking account. In general, the entity is in charge of verifying the payment capacity of its potential clients (to know what amount of credit the bank can deliver without risk) and the origin of their income (to avoid illegal movements).
When the client incurs a debt greater than that agreed with the bank (what is known as “drawing overdraft” ) and delays in paying it, he must pay interest or penalties.
Advantages and disadvantages
As well as other types of account, the current offers tempting advantages at the same time as undeniable disadvantages to its clients, for which it is essential to analyze all its faces before making a decision. Below is a list of the benefits and drawbacks that checking accounts usually generate, starting with the positive points:
+ gives customers access to all the services provided by the bank, such as mortgages, loans, grants and promotions. The checking account is a strong link with the bank, a relationship on a professional and commercial level;
+ acts as a deposit and, at the same time, allows payments to be made through checks or credit and debit cards;
+ Thanks to the possibility of using bank checks, the current account gives the possibility of making balance transfers to third parties, one of the main characteristics that differentiate it from the savings account. Furthermore, if you do not have the necessary funds for the operation, some entities allow you to finance the amounts issued through checks, which translates into the convenience of paying for the consumption of goods and services without having to have the money. Immediately;
+ can offer services such as cashier’s and traveler’s checks at no additional cost;
+ In general, it gives its users the possibility to carry out transfers and transfers, and to domicile the payroll (that the salary is automatically entered ), as well as the payments of taxes and services;
+ is linked to a series of additional products, such as pension plans, investment funds and insurance;
+ allows online operations, which considerably facilitates its accessibility and speeds up processes;
– generally, when the balance does not reach the minimum required by the bank, the maintenance fees increase;
– the bank usually charges commissions for each operation (the most common example is money transfers abroad);
– In some cases, reaching or exceeding a certain amount of balance entails the payment of certain interests.