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Ankit (C.A.-Student) (680 Points)

11 May 2010

I want to know what is basic difference between Bank overdraft A/c, current a/c, cash credit?

Are there any other such kind of facility being provided by the banks. please discuss it.

Another point is that when we see bank statement in date column it shows TRANSACTION DATE & VALUE DATE.

What is the significance of these two cloumn as always i have seen dates same in these column?

Thanks

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Rahul Gupta (Project Controller ACA MBA(Fin.)) (8014 Points)
Replied 12 May 2010

Bank overdraft is atype of account in which the bak provides you the facility to withdrawa an amount in excess of your deposits i.e the account can go upto negative upto the limits sanctioned.

Current Account is an account in which you can deposit and withdraw money any no. of times, however thewithdrwal amount cannot exceed your deposits i.e thre cannot be any negative balances in current account. Also Bank charges service charges for this type of account.

Cash Credit is a type of bank account in which you can withdraw the amount upto the sanctioned limit approved by the bank. This limit is sanctioned against the collateral security, stock or charge against any asset. The interest is charged against the amount withdrawn from the account.

My view >

Transaction date and Vaue date are usually same in case of cash transaction . However, in case of cheque payment it may happen sometime that the date of transaction and date of clearing is different . However, with daily clearing settlement system, these chances are also very bright so generally no difference is seen in bank statements.

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