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 you have deposited or to credit that you have agreed. This account can be opened and managed by a person or by a group of people; 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 a ATM, the cash window or some kind of checkbook (like a check). You can discount bills of exchange, link payments to the account, and collect or pay interest or taxes, for example.
Checks and cards are the means of payment 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 client pays for a product or service with this card, acquires a debt and does not deliver the money immediately) and the Debit (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 how much credit the bank can deliver without risk) and the origin of its income (to avoid illegal movements).
When the client incurs a debt greater than that agreed with the bank (which is known as “Turn bare”) and delay in paying it, you must pay interests or punitive.
Advantages and disadvantages
As well as other types of bill, the current offers tempting advantages as well as undeniable disadvantages to its customers, which is why it is essential to analyze all its faces before taking a decision. Here is a list of the benefits and drawbacks that checking accounts usually generate, starting with the positive points:
+ gives customers access to all services granted by the bank, such as mortgages, loans, grants and promotions. The checking account is a strong bond with the bank, a professional and commercial relationship;
+ acts as a deposit and, at the same time, allows Payments by checks or credit and debit cards;
+ Thanks to the possibility of using bank checks, the checking 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 the need for money. Immediately;
+ You can offer services such as cashier’s and traveller’s checks at no additional cost.
+ In general, it gives its users the possibility to carry out transfers and transfers, and to direct debit the payroll (that the salary), as well as tax and service payments;
+ it is linked to a series of additional products, such as pension plans, investment funds and insurance;
+ allows online operations, which considerably facilitates accessibility and streamlines processes;
– generally, when the balance does not reach the minimum required by the bank, 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.