transactional account
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Transactional accounts are open deposit accounts, typically savings or checking, that usually have very low or null interest rates and include the option to withdraw the funds at any time without commissions.
Another common characteristic is “banking services” or centralised, operative support that is given by the financial entity in control of the account usually in the form deposits, payments, billings, transfers, money withdrawal, loan amortization, pension plan payments, other financial services, etc.
ADVANTAGES
- Possibility to receive detailed information about all spending, deposits and balances through account summaries with makes personal finance management easier.
- Total liquidity: withdrawals and deposits are possible at all times, without penalisation. However, it helps to let the bank know ahead of time when making large withdrawals. - Simplicity and few opening requirements.
DISADVANTAGES
- Little or no interest. Since this is an operation product (not for savings purposes) and is more for day to day operations and activities. This product is not adequate for long term savings since the value of the money can decrease because of inflation.
- There are usually account maintenance costs or other administrative commissions. There also might be charges for transfers, using ATMs that do not belong to the financial entity, empting the account but it’s uncommon to charge for consulting the account balance or moving funds within the same entity.
