A current account is a type of bank account used for deposit and financial management. You can open a personal current account or a business one to facilitate payments (direct debits, standing orders) while allowing other people, businesses, and organizations to make payments easily as well. A current account enables finance matters to work smoothly.
Most businesses (or businessmen for that matter) open current accounts as they have a higher number of transactions with the bank, which includes deposits, withdrawals, as well as contra transactions. It is also referred to as a Demand Deposit Account.
A current account is typically opened through banks. Any amount can be deposited and withdrawn at any time with a current account without giving any notice. It’s also appropriate for making payments to creditors via cheques. Cheques from customers can be deposited in this account for collection.
Now here are the basic current account types and their general benefits.
Basic current account types
Regular. A non-interest-bearing account that offers a more convenient way to pay and trade in large amounts of cash with the ease of a check book facility. Through online banking, you can manage your account and carry out online transactions securely and effortlessly. You get to enjoy greater banking convenience with a check book and/or debit card for your daily transactions plus the benefit of having extra cash at your disposal with a short-term borrowing facility to help you manage unforeseen expenses.
Senior. Includes the regular benefits, plus no annual fee (16 over-the-counter visits per month for free). Also allows management and tracking of transactions easily with a complimentary monthly account statement without the need for an ATM, debit card, or internet banking facility. Some banks will only allow legitimate country residents.
Basic. A great, no-frills current account offering daily banking conveniences. Some banks will only allow legitimate country residents.
Foreign Currency. Allows individuals and businesses to expand opportunities overseas with an account that hedge against foreign currency fluctuations for future use. This type allows you to Manage your daily foreign currency transactions easily make your deposits and withdrawals through Foreign telegraphic transfers, demand drafts, or Transfers from/to a Ringgit Account (MALA).
Prime/Preferred. For individuals 18 years and above. A “prime” or “preferred” current account is usually a prime member feature. It typically comes with a high-interest rate, monthly bonus points, and fee waiver in the case of prime as features. You need to meet a bank’s minimum requirements to become a prime/preferred partner.
Basic benefits of current accounts
More professional business approach: A separate current account keeps professionalism and improves the image and growth of business operations. Getting a current account is a positive step in the right direction, allowing issuing and receiving cheques in the name of the company, to showcasing the seriousness of business transactions.
Separation of personal and business finance. By opting for a current account for business recording income and expenses, account holders will be able to keep personal finance separate from their business dealings. It also allows better handling of finance on the personal front, showcasing the professionalism of business operations.
Enhanced creditworthiness. Lenders and creditors typically check the creditworthiness of a business before giving any loan or benefits. This is processed when interbank connections show that a current account is in place. This is beneficial in the case of export/import businesses, wherein, a guarantee/letter of credit is demanded by foreign counterparties.
Overdraft facility. Current accounts typically allow overdrawing of balance for easing shortfall in funds. This overdraft is not offered by savings accounts.
The bottom line
That’s it. While virtually all banks offer a current account, it’s best to go with a customer-trusted with a good track record. Thoroughly vet a bank and check out businessmen reviews/forums before committing. Best of luck!