Hamara Paisa

Advantages & Disadvantages of a Current Bank Account

Advantages & Disadvantages of a Current Bank Account

04 January 2018

In Pakistan there are many different types of Bank Accounts, whether it is a Current account, Savings account or Fixed deposits.

In this article we are going to discuss the advantages and disadvantages of having a Current account in Pakistan.

Advantages of Current Accounts

Convenience - Current accounts are a convenient way to manage your money – you can arrange to have your wages, pension and social benefits paid in or pay in cash or cheques yourself at a branch. You will also get a cash/debit card which will means you can withdraw money from ATMs and pay for goods in some stores providing you have the money in your account.

Banks will allow customers to transfer cash from one bank to another for a minimal fee whereas others may charge for a similar transaction. For example, EasyPaisa charges you PKR 60 for transferring PKR 1000. 

Safety - The money stored within the bank account will be protected from theft and fires. As well as, being insured by the Government/State Bank of Pakistan. This means if your bank closes you will be able to get your money back. The maximum amount of money that can be insured is PKR 100,000. 

Transactions that occur in your bank account are visible to yourself on your bank statement; you will be able to see amounts of deposits, withdrawals and interest accrued.

If you have a bank account and a debit card, you can access your money from your own banks ATM for free. Although you can access your money from any ATM, you will likely pay a transaction fee of approximately PKR 15 if you use an ATM other than your bank. Unless you have a 1-link card which allows you to use any banks ATM within Pakistan for free.

Ease of paying bills - Bank account holders can make payment to third parties through their savings and current account. The payment may include electricity bills, gas bills, school fees or insurance premiums.

Bank accounts can help you access credit - Banks can help you access credit such as a credit card, personal loan, car, or home loan. Banks require individuals that have an existing credit history. Banks will not lend to individuals who do not have a bank account or credit history as they are unable to verify the monthly income and expenses of such customers, thus are seen as too risky.

Bank accounts enable individuals to receive and send money via remittance.


Disadvantages of Current Accounts 

Transactions are taxed if over PKR 50,000 - Every banking company shall deduct tax at 0.3% from tax filers and 0.6% from non-filers of income tax return, if the payment for cash withdrawal, or the sum total of the payments for cash withdrawal in a day, exceeds PKR 50,000.

The Federal Board of Revenue (FBR) has updated withholding tax rates as a plan by the Government of Pakistan to increase the tax revenue as a large percentage of individuals do not pay Income tax in Pakistan.


Potential Fraud - Your bank account could be subject to potential fraudulent activity. However, the risk of this happening can be minimised if users have good oversight over their bank accounts. If users lose their debit card, they need contact your bank immediately to notify them and to block the debit card.


Hidden fees - There is a general misconception amongst customers that banks usually have various hidden fees within their products that you only find out about later.

If users read the terms and conditions they will be aware of all the hidden fees; however, the average customer will not be aware of where to find this information.

At Hamara Paisa we aim to highlight these fees prior to you even applying for the product, in order for you to be fully aware of any additional costs.


ATM Fees - Pakistani Banks will charge you approximately PKR 15 if you use your debit card on an ATM that is not theirs. Also, depending on the type of account you have, you must maintain a minimum balance of a certain amount to avoid being charged. It is always best to shop around for the best product that fits your needs. Please speak to one of our advisors who will guide you towards the account best suited to your needs.

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