Current account (banking)

A transaction account, checking account, current account or demand deposit account is a deposit account held at a bank or other financial institution. It is available to the account owner "on demand" and is available for frequent and immediate access by the account owner or to others as the account owner may direct. Access may be in a variety of ways, such as cash withdrawals, use of cheques and debit by electronic transfer. In economic terms, the funds held in a transaction account are regarded as liquid funds and in accounting terms they are considered as cash.

Transaction accounts are operated by both businesses and personal users. Depending on the country and local demand economics they may not earn any or they can earn very high interest rates. Again depending on the country the financial institution that maintains the account may charge the account holder maintenance or transaction fees or offer the service free to the holder and charge only if the holder uses an add-on service such as an overdraft.

Transaction accounts are known by a variety of descriptions, including a current account (British English), chequing account or checking account when held by a bank, share draft account when held by a credit union in North America. In the United Kingdom, Hong Kong, India and a number of other countries, they are commonly called current or cheque accounts. Because money is available on demand they are also sometimes known as a demand accounts or demand deposit accounts. In the United States, NOW accounts operate as transaction accounts.

A current account is the form of transactional account found in the United Kingdom and other countries with a UK banking heritage; a current account offers various flexible payment methods to allow customers to distribute money directly to others. Most current accounts come with a cheque book and offer the facility to arrange standing orders, direct debits and payment via a debit card. Current accounts may also allow borrowing via an overdraft facility. One of the main differences of a current account to an American checking accounts, is that they earn considerable interest, sometimes comparable to a savings only account, and there is no charge for withdrawals at ATMs, unless it's a third party ATM machine when the third party company will charge.

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