Understanding a bank current account

Who has never had the reflex to open a bank current account at the start of working life? However, between the different offers from traditional or online banks, the way interest works, the payment methods offered, the technical language of advisors... this flagship product ultimately remains relatively unknown to the general public!

Through this educational article, we invite you to finally unlock all the secrets of the bank current account. We will concretely address its different possible uses, the main operations that can be carried out there as well as the real cost of this essential daily service.

Thanks to these detailed explanations and advice, you will understand everything about the exact workings of the current account in order to get the most out of it. Goodbye bankers' jargon, and hello savings by mastering the ins and outs of your basic banking product yourself. Here we go for our step-by-step decryption!

🥀 What is a current account?

The comptes bancaires currents are very popular among companies, companies, public companies, businessmen who usually have a higher number of regular transactions with the bank.

It can be opened at most commercial banks. Being a zero account, it is usually associated with huge transactions on a regular basis. Due to the fluidity offered by these accounts, they do not earn any interest. These also usually have no limit on the number of transactions that can be made.

Money can be deposited and withdrawn there at any time without notice. It is also suitable for making payments to creditors using checks. Checks received from customers can be deposited in this account for collection.

🥀 The different types of current account

A consumer has the choice between several types of bank account. Among them, we find:

Individual bank accounts

The individual bank account is the most used current account in the world. Subscribed by a single holder, who must be a natural person, the individual bank account allows day-to-day financial management and access to Bank card. Today it is difficult to do without this type of current account, essential in everyday life.

It can be opened from the age of 12, but unemancipated minors must be accompanied by a legal guardian. Minors generally have a bank card with systematic authorization, which prevents them from being overdrawn. Check out this article on bank accounts for minors.

Joint current accounts

A joint account works in the same way as an individual bank account, except that it can be held by several co-holders. Most often, it is couples who hold a joint account. This type of account is also accessible to two brothers, two friends, a parent and a child...

A joint account can also have more than two co-holders, but only in traditional banks. Online banks often restrict subscription to two holders. If there are more than two holders, the current account is also called a collective account. Also referred to as a joint account.

Undivided current accounts

The undivided current account is very similar to the joint current account, due to the fact that it can also be held by several joint holders. The difference is that no banking transaction, even a simple withdrawal, can be carried out without the agreement of all the co-owners.

This more restrictive mode of operation is generally not used by couples, but by a group of people wishing, for example, to manage an inheritance.

Associated current accounts

Finally, an associated current account is an account dedicated to associations and companies. This is a cash account into which they can deposit sums of money and then make them available to the company.

In this article, I mainly talk about current accounts dedicated to individuals. I am talking specifically about individual bank accounts and joint accounts.

🥀 Current account fees

For several years now, a current account has been associated with ever-increasing bank charges. It is not free, far from it… especially in traditional banks. A current account generally includes the following fees:

• Account maintenance fees
• Credit card fee
• Payment incident costs (agios, intervention commission, information letters, direct debit rejection costs, etc.)
• Additional costs, related to additional options (SMS alerts, bank check, reissue of bank card, reissue of secret code, means of payment insurance, etc.)

To open a current account which is almost free, request the option of online banks. They allow you to create a bank account from your couch. In general, here is how you can reduce your bank charges which continue to grow day by day.

🥀 Close a current account

A current account can be closed at the initiative of the bank or the customer:

At the initiative of the bank: a bank can close a bank account without having to justify itself. However, it must give two months' notice in order to give the consumer time to open an account elsewhere.

At the customer's initiative: the customer can also close his bank account free of charge whenever he wishes. All he has to do is send a registered letter with acknowledgment of receipt, fund his account so that the balance is positive and return or destroy his means of payment.

🥀 The difference between a checking account and a savings account

At first glance, the current account and the savings account may seem similar. And for good reason: they are both bank accounts allowing you to deposit your money in the bank in complete security. But behind this common appearance hide very distinct functions and uses.

Let's start with the current account. As its name suggests, it is primarily intended to manage your daily banking operations: register your income, pay your bills, collect your salary, etc. Concretely, it is the support account to which your bank card is attached to pay for your regular expenses.

The current account is therefore made for a transactional use. The money passing through it generally does not earn interest and can be withdrawn at any time. This permanent access to funds makes it a practical account on a day-to-day basis, but not very optimized for growing your savings.

Conversely, the savings account is tailor-made for building up savings. The sums placed there will gradually generate interest, albeit low, but with zero risk and almost immediate availability. An intermediate product between nest egg and investment.

Concretely, this type of account is not designed to deposit your salary or pay for your groceries under penalty of hefty commissions. Its use is limited to setting aside part of one's income, with a view to building up a precautionary mattress or carry out a future project.

As we can see, where the current account is designed for daily operational management, the savings account is dedicated to building up a money reserve. Two banking products with very distinct purposes that should not be confused!

Used well together, they allow you to benefit from both the practical advantages of the current account and the interest catch-up on a savings account. A perfect synergy to optimize your banking management.

🥀 Benefits of having a checking account

Opening a current account in a bank has multiple benefits on a daily basis. Whether to manage your money or make payments, a bank account is essential. Overview of the concrete benefits you can enjoy.

First of all, having a current account allows you to domicile your income: salary, allowances, retirement, etc. The money arrives directly in your account without intervention on your part. This is the way simplest and safest to receive his income.

Other size advantage: a bank account gives you access to all payment solutions. You can pay your bills by direct debit or make your purchases by credit card, online or in store. No more risky use of cash!

Furthermore, thanks to your bank card and your checkbook, you can withdraw or deposit funds 24/24 at ATMs. This permanent availability is valuable in the event of an unforeseen event.

On the management side, your current account allows you to easily track your expenses and income thanks to detailed bank statements. This way you keep control of your budget on a daily basis. And in the event of a setback, your bank advisor can support you.

As we can see, having a bank account considerably simplifies and secures the management of your money on a day-to-day basis. Between traceability of operations and associated services, it's difficult to do without it!

🥀 Disadvantages of having a checking account

Although essential on a daily basis, having a current account also has certain disadvantages that should be kept in mind. Behind the apparent simplicity of a bank account there are also some constraints.

First of all, holding a current account is not never completely free. Beyond a minimum amount to keep on it, you will have to pay for certain optional services as well as an annual fee of a few dozen euros. A significant cost.

Another downside, your banking data and your payments are permanently traced. Although this provides security, this constant traceability of balance or transactions may be perceived as an invasion of privacy for some.

On the practical side then, the opening hours and deadlines of traditional banks can sometimes be restrictive. Whether to contact your advisor or carry out certain operations, a 100% mobile neo-bank will offer much more flexibility.

Furthermore, it happens that technical malfunctions cause the temporary unavailability of banking services: faulty bank card or ATM, mobile application under maintenance, etc. Disruptions that are always very financially penalizing.

Finally, the last negative point is that the multiplication of services offered by traditional banks can sometimes lead to a more complex offering, to the detriment of transparency. Reading between the lines of contracts becomes essential before committing.

As we can see, having a current account, as practical as it is, also presents its share of constraints for which you must prepare. However, the benefits still far outweigh for the vast majority of customers.

🥀FAQs

What is a current account?

A current account is a bank account opened with a bank to manage your daily income, expenses, payments and withdrawals. It is a living account made for day-to-day operations.

Does a current account pay?

Yes, you will generally have to pay some fees such as account fees, card fees, fees or commissions. But it remains reasonable, from 2-3€ per month.

Can I overdraw my account?

Yes it's possible. You will then benefit from an overdraft authorization, capped at a few hundred euros, in exchange for fees and interest on the amount in the red.

How do I track transactions on my account?

You can view your balance and transactions in real time for free via your bank's mobile application or online space. And a paper or electronic statement is published once a month.

Is it easy to close an account?

Yes, closing is done by simple written request to your agency. The balance and current transactions will then be transferred to your new bank if you open another one.

🥀 Closing

At the end of this comprehensive overview, the functioning of the current account definitely no longer holds any secrets for you!

We have analyzed its different concrete use cases to manage your income, expenses, payments and withdrawals on a daily basis. We have deciphered the bank statements and the technical language of the advisors point by point to now see clearly. And we have reviewed the main advantages and disadvantages of this banking pillar in order to benefit from its benefits without unpleasant surprises.

You are now ready to open a current account with full knowledge of the facts or ask the right questions to your banker to optimize the one you already have. All bank account codes delivered on a tray for your financial comfort!

It is now up to you to shop among the different offers on the market to find the most attractive formula according to your needs. Great savings!

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