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chithra

chithra (Querist)
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12 December 2013 please clarify the difference between current account, cash credit and overdraft

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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12 December 2013 Good question, each one has to know about the differences of about it.

Current account means it is asset account to the account holder and liability to the bank account it is like savings account but if we have more transaction in out account, means issuing cheques frequently or any other transaction for our business purpose then we have to open current account because of there is restructions on number of transaction is savings account, savings account main view and concept is proposing savings by the clients(peoples) but it is not for the current account, In one word depositing of our money(cash) into the bank and drawing the same for our use(frequently) is called current account generally current accounts opens in the name of firms,companies, trusts etc.... But savings account doesn't open except on the name of personal name(means either individual or HUF name)

Cash credit means it is loan account and it is asset to the bank and liability to the client, first drawing of bank's money and later depositing of our money in that account is called cash credit, in one words we can say if bank provided finance to use to continue and utilise for the purpose of our business transaction is called cash credit account.

Overdraft means drawing of excess amount than the actual deposit available balance in our current account, for example if you have Rs.10000 dr in your current account but unfortunately you drawing Rs.11000(means in any form like by debiting bank charges or any thing) then your current account balance is Rs.1000 cr it is called overdraft account, Due to the satisfy of our transactions into out current account bank feels to allow to some of amount of overdraw than actual balance available to you, means it is short term loan providing by the bank to you.
Is you required any further clarification please ask the area of doubt i will clarify you.

OM SAI SRI SAI JAI JAI SAI

chithra

chithra (Querist)
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13 December 2013 whether a savings bank account could be opened in the name of an A.O.P.?

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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13 December 2013 No, For AOP savings account couldn't open according to the bank norms, it required current account.

OM SAI SRI SAI JAI JAI SAI

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