How Much Money to Keep in Current Account?

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by , 23 February 2020 at 2:00 pm (97 Views)
There are two common types of accounts that people open with banks. They are savings and current accounts. A savings account is a deposit account that provides interests to the clients and has certain transaction limitations. The current account is used to carry out daily unlimited funds transactions. There are a higher number of transactions that take place with checking accounts when compared to the savings transactions. The deposits and withdrawals are common in current financial records.

Advantages of Owning Current Bank Accounts

There are many advantages that people have when they use this type of banking option.

  • The users get to carry out large volumes of payments and receipts in a systematic manner.
  • There is no limit on the money that can be withdrawn at one time. They will be allowed as per the cash transaction fees.*
  • Direct payments can be made using cheques, demand drafts, or even pay-orders.
  • The clients can remit cash between bank institutions that might attract a small fee.*
  • There are allowed overdraft facilities.*
  • It also can come with small interest earnings for the cash kept in the bank either quarterly or half-yearly or yearly.*
  • It helps in the businessmen to run their industry effectively and carry out money transactions safely and efficiently.*
  • Some of the other benefits that clients enjoy include deposit and withdrawals from any branch location, no fee on inward remittances, transfer of money to multi-locations, etc.**
  • The users can enjoy mobile banking and internet banking facilities to allow safe and easy options to carry out transactions at any time of the day or night. It saves the checking account holder’s time, fuel, and money.

Money to Be Kept in the Current Account

It is similar to how much funds the players keep in an online casino. If the gambling site is taken into consideration, the client will be loading cash based on the money that is needed to try out a certain slot or table game. There is the option of joining a £1 deposit UK casino or one that has a minimum limit of £100 to start with. The benefit of the smaller funds casino is that it has games to suit the low rollers. Similarly, certain banking institutions will be offering the current deposits at a very low fixed rate, or there is no limit on the money that needs to be put in or to be held as balance at all times. There are others that would ask for a certain balance and would only provide the option of opening it for fixed money. It is important for the client to choose ones that meet their business’s needs and requirements.

If the business pays out salaries and other expenses of the firm through this, then it has to be holding that cash limit always. It is better to hold some decent balance in the bank to the tune of one or two months’ average profit to smoothly run the finance operations.

The Cost of Holding the Current Account

If there is money left in the current account, there is no need to worry about paying any of the service fees. If the customer needs an overdraft from the bank, then the financing institution is allowing them to spend more than what is available. This is called overdraft, and such lending will attract a fixed amount of interest. This interest will be on the higher side than what a person pays for getting a personal loan. There are also interest-free overdrafts provided by certain institutions, but they are hard to find. There is an overdraft limit fixed while opening this financial record, and if the client goes beyond the limit, it will attract hefty interest rates. As there are fees and certain money payments involved in holding this in banks, it is advised that the client does thorough research to find the most suited banking options.

Dig Deep and Choose the Best Option

One of the best ways to find a suitable current account that meets the needs and requirements of the person is to look at comparison websites. They will offer you complete details of the charges and fees of the different financial institutions as well as details of overdraft charges and the cash withdrawal charges of foreign currencies. Trying out two or three comparison websites will provide a better and clearer picture that will help in taking the right decision. Once done, the account can be opened in person or online.

Updated 25 February 2020 at 6:42 pm by Integrity

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