The bank account is a way in which a person can pay money in the account, or make payments for goods, withdrawals of cash.
Main criteria of having an account is the need to withdraw money when necessary.
The need to maintain a minimum bank balance level is needed in order to avoid going overdrawn. Here when overdrawn the bank might refuse additional credit, it will impose a stated interest finance charge against the account. Naturally the bank will levy a higher charge on overdrafts, personal loans than it would pay out on savings and credit balances.
Employees need a bank account to receive there salaries through the BACS payment system.
There is the theory that a bank can not go bankrupt. Well this was true until Northern Rock broke this theory recently. The risk of having a bank account is relatively risk free generally speaking.
Some accounts might have added features such as overdrafts which are charged interest for this facility. Bank accounts depending on provider, will charge a fee for setting up the overdraft, or to increase the level of overdraft might incur charges.
For those holding bank account balances, the savings rate will add to a person’s current account balances by a stated percentage rate each year. The interest might be calculated on a daily/monthly or yearly basis. It is important to read the small print of each current and savings account provider before agreeing to join with a given bank.
Some bank accounts might be branch along with telephone banking, on line or postal only method of banking. Each bank is different in terms of the level of service provided. Similarly each bank operates in different towns, and cities. Rural areas are very lowly catered for by banks. So in selecting a provider it is important to balance the need to gain access to your funds with the savings rate and account features offered.
At a branch, people can pay bills through the counter, purchase foreign exchange and other financial products. The ease of paying in paper cheques along with cash to be saved for another day is well accommodated. By having a cheque book it is possible to write your own cheques, pay bills. The bank statement is a record of all payments and receipts, the records are updated daily, and the statement itself is sent to the account holders address usually on a monthly basis.
Banks seem relatively happy to offer bank accounts to new customers, as the banks are attracting business for themselves. When an account holder wants to buy a house, or a car, the customer can obtain a loan, or mortgage usually with great ease. Conversely when a bank account holder has a high bank balance they can opt to save that capital into a savings account.