Kinds of Bank Accounts : The Current Account

Current Account :

The money deposited in the current account can be withdrawn in part or full anytime through writing a cheque on the bank concerned. The bank does not pay interest on the current account instead sometimes realize a nominal charge for the customer. these deposits are created in one of the two ways; either by converting cash into demand deposits or using a part of loans acquired by the bank and depositing the same with the bank. The current account is an important source for accelerating the velocity of medium of exchange. For example, 85 percent of the total money that is in circulation in an economy is constituted by the demand deposits.

The current account is generally operated by businessmen, traders, public bodies and government departments because the daily or weekly withdrawals and deposits are not restricted in these accounts.