What is a Checking Account?

What Does Cuenta Corriente Mean

It is known as a current account (abbreviated: cta. Cte .) To a banking contract that allows the account holder to deposit funds and dispose of them effectively, through various products such as stubs, checks, ATMs, bank windows or electronic transfers, but that at the same time does not generate any type of interest in favor of your person.

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A current account allows the user to have their money, buy , pay taxes and make payments for other services of own bank , and its account income principal.

It is usually associated with debit cards, credit cards, electronic wallets and other products. Usually, when you take out a loan, your installments are paid through discounts in a checking account.

To open a checking account, various requirements are usually required, usually greater than a simple savings account , such as salary checks, credit record reviews, etc. And often the financial institution requires a minimum opening amount , if not a minimum balance (not to pay maintenance amount).

In some countries, such as Argentina, the current account is understood differently: as a line of credit opened in favor of the client , which can be used up to a maximum amount, as long as it pays what is owed the following month without fail.

See also: Bank credit

What is a checking account for?

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A checking account does not generate interest in favor of the user.

As has been said, a checking account is a tool to dispose of the money entered more quickly , which is usually accompanied by instruments such as checkbooks or credit cards.

Since a current account does not generate interest in favor of the user , it is usually understood not as a savings deposit , but money destined for daily use, that is, an account in which money will enter and leave regularly, from which they will discount loans, taxes , etc.

Difference between checking account and savings account

Savings accounts are intended to accumulate capital.

Savings accounts, unlike checking accounts, are simpler financial instruments : bank deposits in which money is deposited that will be little mobilized (or less than current, at least), and therefore destined to grow.

Because they have a simpler process than a checking account, savings accounts do not receive financial instruments such as credit cards or checkbooks (usually only a debit card) since their purpose is the accumulation of capital ; For the same reason, they generate a specific monthly percentage of interest in favor of the holder, deposited at the end of the month in the account itself.

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