What Are the Disadvantages of a Current Account of a Bank?
By Anupama Deshpande | July 09, 2019

Banks offer Current Account which is a product suitable to the business community who need to make a large number of transactions almost on every day. It is designed to suit the requirements of partnerships firms, sole proprietors firms, individual self-employed professionals, start-ups, businessmen, business houses, traders, companies, enterprises, LLPs, entrepreneurs, etc. These entities carry out regular financial transactions in their accounts hence Current Account is being offered to them as a convenient banking solution.

Current Accounts usually do not have any cap on maximum number of transactions and that is the reason why the customers need not worry about processing of their transactions in a smooth way. Almost all the banks in India provide their various current account products which suit varied needs of different customers. To open current account is very easy and hassle free.

Related topic How to Close a Current Account?

There are wide range of current accounts offered by the banks which are as follows:

• Regular Current Account
• Premium Current Account
• Current Account for Export-Import Businesses
• Start Up Current Account
• Flexi Current Account
• Foreign Currency Current Account
• Business Advantage Current Account

There are many advantages of opening a current account but still there are many disadvantages of a Current Account of a Bank. We are sharing below as to what are the disadvantages of a Current Account of a bank?

Unlike Savings Account, it does not earn any interest on money deposited in this account. This is the biggest disadvantage of having a current account. Customers loose the opportunity cost on their funds which could have generated some portion of interest if kept somewhere else. Some of the banks offer slight interest but it is very low.

Whenever current account holder needs any additional service, he/ she is required to pay a huge amount of money as service charges because service charges in current account are very high as compared to those of a savings account.

Banks do keep a limit on issuance of free chequebooks or demand drafts e.g. 25 numbers per month. If you want more than that, you need to pay extra money for that.

Many banks keep a cap on free cash deposits & free cash withdrawals on monthly basis. After crossing that limit, one needs to pay the cost.

Higher Amount of Monthly Account Balance is required to be maintained in a Current account. If you do not maintain the minimum account balance, you will have to pay the penalty levied by the bank. Get more details on Difference between Current Account & Savings Account.

The fine print and the paperwork involved in current account maintenance is comparatively more confusing and lengthier than that of other types of accounts such as savings account, fixed account, etc.

Related topic How to Transfer a Current Account?

Some of the banks do not provide free transactions and they charge transaction fees on current account transactions. These transactions may involves online fund transfer, withdrawing money from other bank's ATM, etc.

Unlike Savings Bank Accounts, you cannot place standing instructions to make bill payments automatically in your current account.