A checking account is a deposit account opened with a bank that allows numerous withdrawals and unlimited deposits. Current account is the most liquid account and can be easily accessed at any time through ATM, check, online banking, credit or debit card. Due to its characteristics, the current account is also known as a sight or transaction account.

Many financial institutions offer checking accounts with very low monthly or annual fees and traditionally banks have used this service as a loss leader. The loss leader is a marketing term that involves offering a product below its market value to attract consumers. When consumers are targeted with free or low-cost checking accounts, banks offer them more profitable products such as mortgages, personal loans, life insurance investments or retirement funds.

Checking account features
To meet the needs of users, different types of checking accounts have been developed. These can be student accounts, business accounts and joint household accounts. Due to their liquidity, checking accounts generally do not offer any interest income.

Current accounts can be easily set up for private individuals in bank branches. Companies may be required to go through a specific procedure depending on banking rules and government regulations. The current account is one of the most practical solutions to have your cash available for all transactions, e.g. For example, to pay your bills, purchase goods online and pay with a credit or debit card in a store. The sight account is the simplest banking service and is used by almost every bank customer in the world. This account gives you the freedom and convenience of accessing your money instantly and at no additional cost, except for transaction fees in some cases.

Some banks offer checking accounts with a specific credit limit that you can use in an emergency. If this is the case with your transaction account, you can rest assured that you will have access to additional cash at any time. In the meantime, you should be more careful not to exceed your balance without good reason. Typically, this short-term loan comes with high interest rates. For some people who like to spend as much cash as possible, a checking account with a line of credit may not be the best option.


Advantages & disadvantages of checking account
Although checking accounts in terms of liquidity are close to cash, it is considered that keeping your money in a bank and accessing it over your transactional account may reduce unnecessary spending. It is also a good alternative to cash in case of a robbery, wallet loss or other accidents. Instead of losing all your cash, your funds would safely be held in your bank account.

Advantages
Nowadays, it may be hard to imagine receiving your paychecks in cash, which include physical reception after depositing cash in your account. It is hard to imagine going and paying for your utilities and other bills. Checking accounts even allow you to set up regular payments for mortgage or other payments that occur on a regular basis easily.

Most of the banks also offer debit or credit cards tied to your transactional account, which allows you to debit funds from the account by going to your closest ATM instead of visiting the branch, standing in queues and paying transactional fees. In addition, credit and debit cards allow you to do online shopping, purchase plane tickets and rent a car. Your credit or debit card information can also be used as a personal identification method for different sites online.

Disadvantages
Overdraft fees and huge interest payments are the biggest disadvantages when using a checking account. Many people do not notice when the negative balance is reached and due to the interest payments that may be up to 20%, the credit is growing at a high speed. Luckily, credit line, as the name implies, goes only with a credit card, while it’s impossible to open a credit line for a debit card. Therefore, when deciding what type of card you should chose with your demand account, evaluate your ability to control your spending.