Banking & Finance

Current Account Meaning And How it Works

current account meaning
Written by Chidera

Do you wish to learn more about the facts about owning a Current account in Nigeria? Are you quite confused about what it takes to own one? Well Stick around, I will show you what it is all about in simple detailed guide. Do read on!!

current account

current account

What is a current account?

A current account is a transaction account that is usually opened by a businessman with more than the normal business activities especially if he needs access to his funds at all times. He can make deposits and withdrawal; without limits.

Features:

  • This account is operated specifically for running a business
  • These accounts do not give interests to the owner
  • It requires a much higher opening balance than the savings account
  • There is no restriction or number of deposits or withdrawals
  • Minimum balance to be maintained periodically else penalties

Read more: How to open a domiciliary account in Nigeria

Advantages of owning a Current Account

  • It enables a businessman to run his business transactions
  • The businessman can withdraw at any time and without limits but is subject to cash transaction tax levies by the government.
  • Deposits can be made at any location (any bank) with minimal issues of transaction charges
  • The advantage of overdraft facility (ability to borrow money from the bank when there is no money in the account)
  • Access to ATM Facilities
  • It enables banks to collect receipts on behalf of customers and credit to the customers current account
  • Online banking
  • It is capable of handling large volumes of receipts and payments smoothly and promptly
  • it can sometimes earn interests on account balance

Read more: difference between Current accounts and Savings account

Types of current accounts

There are varieties of currents accounts that can be opened in Nigerian banks. they vary only in the availability of packages available to the given current account and they vary from bank to bank. you can choose a bank you wish to work with and inquire about their current account services.

How to open a current account?

You can learn how to open one by clicking here.

  • The interest rate can be very small when compared to a savings account
  • ┬áThere is a lot of charges associated with the packages added to the overall operational burden
  • A lot of business transactions attracts huge fees
  • It discourages savings
  • Losing one’s ATM card may restrict access to your account
  • A lot of paperwork is required when opening the account.

A current account is an added advantage if you own a business. it ensures you work smarter within your organization.
If you do need more help, please place a comment below.

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About the author

Chidera

Chidera is an experienced freelance blogger and social media enthusiast. Click here to see all my posts