Issuing of cheques on regular basis from od

Others 571 views 2 replies

Kumar

Finance Manager

82 Points Joined April 2012

Dear Seniors & Experts,

Can we issue cheques on regular basis from Over Draft A/c insted of CA A/c ?

As far as my knowledge goes Over draft is a liability and always negitive balance. Hence kindly let me know whether we can issue cheques on regular basis from OD account insted of Current Account by transfering the funds from CA to OD Account.

as far as company is concerned is it good practice operating OD account insted of C.A account for day to day business transcations like ( Utalitiy payments, Vendorpayments etc) ?

Please guide me.

an early reply in this regard would be appreciated.

Thanks in advance,

Kumar

Replies (2)

Khushbu Jaiswal

CA Finalist

528 Points Joined September 2012

In my opinion you can do it and by transferring the available balance from CA A/c to OD A/c you can reduce your interest liability on OD a/c for the period upto which the transferred fund is not utilized.

Mihir

Wealth Manager

5293 Points Joined December 2008

Overdraft facility is not free. Bank charges interest. So use current account. You can read the interest/fees schedule of your bank. In case the bank charges excessive interest, it will be your fault of not looking at the terms and conditions of operating overdraft facility. Bank won't be responsible.