| A current account is a bank account which enables bank customers to make a deposit and withdraw funds from a federally-protected account at any time. Different banks use different definitions for a current account, but generally current account holders can use personal cheques in place of cash to repay debts. Electronic debit cards or cash machine cards can also be used to access individual accounts or make cash withdrawals.
Most banks provide some type of current account service. Some may require an initial deposit before establishing a new account. Low-income customers may choose a no-frills current account which offers free use of personal cheques and other services. Other clients may benefit from interest rate payments by sustaining a high minimum balance each month.
Holders of current accounts should keep track of their account balance, though the financial institution will routinely issue its own accounting statements. Cheques must reflect an actual amount of money contained in the current account itself. If a cheque is written for an amount of money higher than the available balance, the cheque writer will be charged numerous fees. The recipient of the 'bad' cheque can demand immediate cash payment for the original debt and a substantial fee for the returned cheque. Some financial institutions will shield holder of current accounts by making the proper payments and notifying the cheque writer about the overdraft. Frequently the financial institution will recuperate their losses by charging for services rendered, so it is better to avoid writing cheques when the balance is unknown.
Most banks have different methods which enable current account holders to check their balances and reconcile their records. Monthly statements of withdrawals and credits are printed and sent to current account holders. Cash machines provide an option to check the balance, while phone-in or online accounts can provide real time updates on processed and still unpaid cheques.
For detailed information on current accounts, please visit www.checkingaccount.ca. |