Checking account :
The checking account is the most widely used form of payment account used by private customers for payment outflows and receipts. The bookings are made, for example, by bank transfer, direct debit or standing order.
Checking account as main payment means
Many payments are possible today only by booking. The number of retailers and service providers who accept checks and cash is steadily falling in the German-speaking world.
Since some business types would suffer disadvantages when they receive cash receipts, the principle of settling invoices by bank transfer has prevailed. The private frame uses current accounts, professionally business accounts, which allow for a higher latency of transfers and automated instructions. The circulation account (“giro”: Ital. “Circulation, circle”) is also required for payment with the help of the girocard, which in 2007 replaced the hitherto common debit card (see also the lexicon entry for electronic cash).
This card can be read at points of sale via a billing system, the card and a direct debit or collection from the buyer’s account to be initiated, reserve a positive cover on the amount at the time of the contract.
History and development of the current account
It is believed that the first private accounts from which money could be moved to another account by the 11th century AD. date. They were probably followers of the Islamic hawala system, where traders among themselves acted as banks and the money could be shifted from one bank to another.
In Europe, the system prevailed from the 14th century in the national payment transactions among traders and producers. Until the end of the 19th century, cashless payments were reserved for wealthy citizens and commercial companies. This changed with the introduction of the postal check service in 1906 by the PTT in Switzerland, a kind of first cheap checking account. From this point, wages, salaries, rents, and other large sums of money were relinquished on a cashless basis. The payment of smaller amounts in stores became possible only with the introduction of the first Eurocheque cards in 1975 and was able to prevail in 2002.
Legal and business use
According to §355 HGB, the current account forms a kind of current account, which is intended for permanent circulation and is closed every day with a balance. In order to open the account, one of the two contracting parties must be a merchant according to §1 Abs. 1 HGB. This condition is fulfilled by banks, whereby the other contracting party is usually a private person.
Current accounts can have different conditions. These included a minimum receipt of funds, fixed debit and credit interest (see the encyclopedia entry on debits and credits), or a fee schedule for the use of transfers, standing orders and account statements.
Some providers offer these services to customers only in online form and waive their own branches or even ATMs. Theoretically, however, cash can also be withdrawn from checking accounts up to a fixed daily limit.
If the finances on the account are not used for a long time, the form of a savings account should be used instead. For professional purposes, a business account offers. This is usually associated with account management costs, but allows several hundred bookings per month, making it suitable for businesses and entrepreneurs. When this framework is reached differs from bank to bank.
Business Account – What is a Business Account?
A business account is just like a private checking account a current account. It is designed to help freelancers, the self-employed and businesses keep private and business expenses strictly separate. This is indispensable, for example, for the tax return or the business evaluation.
Companies are required to keep at least one business account. For freelancers or self-employed a corresponding decision is optional. For the business current account, which thus serves to process payment transactions, EC and credit cards are issued on request, just as for the private current account. It may also be granted a disposition credit line.
Learn more about the benefits of a business account.
In detail, there are some differences to the private checking account. For example, some banks charge higher account maintenance fees. In return, however, better conditions are also granted elsewhere: For example, more than one person may be entitled to an account in the private checking account. The credit line is higher.
In addition, the current account can often be linked to third-party software that can handle financial transactions from home or office. The bookkeeping or the tax declaration are thus facilitated. In this way, the business account also helps to find out where there are outstanding debts or where even payments have to be made.