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What is current deposit? |
| Answer» Big businessmen,\xa0companies, and institutions such as\xa0schools, colleges, and hospitals have to make payment through their bank accounts. Since there are restrictions on the number of withdrawals from a savings bank account, that type of account is not suitable for them. They need to have an account from which withdrawal can be made any number of times.Banks open a\xa0current account\xa0for them. Like a savings bank account, this account also requires\xa0a certain minimum amount of deposit while opening the account. On this deposit, the\xa0bank does not pay any interest on the balances. Rather the account holder pays a certain amount each year as an operational charge.These accounts also have what we call the overdraft facility.\xa0For the convenience of the accountholders banks also allow withdrawal of amounts in excess of the balance of the deposit. This facility is known as an overdraft facility. It is allowed to some specific customers and up to a certain limit subject to previous\xa0agreement\xa0with the bank concerned. | |