A transaction account is a deposit account held at a bank or other financial institution which is accessible immediately when needed by the account holder or to others as the account owner may direct. Funds available in transaction account are known as liquid funds. Use of cheques, debits by electronic transfer and cash withdrawals, telephone banking, Internet Banking can be performed on transaction account.
Features of Transaction Account: - Transaction account permits account holder to make and receive payments with the following medium: -
i. Debit card
ii. Electronic fund transfers
ii. Cheque and money Order
iv. Online Banking
v. Cash Money
vi. Direct Debit- is a withdrawal of money at financial institution that has authority to make recurring payments or to transfer investment funds.
vii. ATM Cards
In India, NEFT and RTGS services are most popularly used for making payments.
Transaction account can be accessed with the following means: -
a. Cheques: - These are the traditional way of making payments through which one can transfer any amount of money to a person/firms.
b. Branch access: - While accessing to bank branch, user can avail all services with financial advice.
c. Internet Banking: - It offers a comprehensive banking service to their customers that include viewing balance statements, Money transfer, Bill payments etc. online.
d. Telephone Banking: - It also allows customer for accessing banking transactions on telephone.
e. Mail Banking: - It can be used by customers of virtual banks. Here, one can deposit cheques into their account.
f. Automated Teller Machines: - It enables user to perform financial transactions without attending a branch. But a daily limit of cash withdrawal is preset by the bank branch.