What is cc limit?
Cash credit limit or CC limit is a kind of current account with cheque book facility.
CC limit holders offers stock and debtors as primary security to the bank.
A CC limit or cash credit limit allows you to withdraw money or issue cheque up to the approved CC limit, even if there is no balance in the account..
How is CC limit calculated?
It is calculated by considering the total value of paid stock (Paid stock=Stock fewer Creditors) plus book debts (not more than 90 days old) and deducting margin from the same. In most of the cases, debtors up to 90 days are considered for calculating DP.
How does CC limit work?
A cash credit loan allows a company to withdraw money from a bank account. You can withdraw as many times, but up to its withdrawal limit. The borrowing limit is decided on the basis of the applicant’s credit history or creditworthiness, which is based on the company’s structure of the current assets and liability.
What is OD interest rate?
In other words, overdraft is a credit arrangement allowed by the banks to individuals for using or withdrawing more money from their respective accounts even when it is below zero. … Some banks charge the interest rate on the amount withdrawn for use or charge on the reducing balance basis.
What is OD facility?
Overdraft facility is a financial facility or instrument that enables you to withdraw money from your bank account (savings or current), even if you do not have any account balance.. … You typically have to pay a fixed interest rate to avail an overdraft limit.
What is OD and CC limit?
Cash Credit (CC) is a short-term loan offered to businesses to meet their working capital requirements, whereas Overdraft facility is funding offered by banks to individuals or companies to withdraw money from the banks even if their account balance is low, zero or below.
What is CC bank account?
A Cash Credit (CC) is a short-term source of financing for a company. … It enables a company to withdraw money from a bank account without keeping a credit balance. The account is limited to only borrowing up to the borrowing limit. Also, interest.
What is OD in banking terms?
An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be “overdrawn”.
What is OD limit?
Overdraft limit is basically the money value permitted by the bank which can be withdrawn additional to the credit bank balance. Moreover, the bank also charges extra fees if a customer exceeds his/her overdraft limit, or for bounced payments.
How is OD interest calculated?
The overdraft interest rate is calculated by the average daily balance method. In average daily balance method, the interest is calculated by considering the balance of a current account at the end of each day or each period.
What is CC and OD account?
Cash credit is a short-term business loan. It is meant for entrepreneurs wanting to get quick working capital. An overdraft facility, on the other hand, is a long-term financial assistance. It lets you withdraw money from your account even with zero balance.
How do I use OD account?
It almost works like an approved loan. As and when you want, you can keep withdrawing money from this overdraft account. You have to pay interest on the money borrowed for the time you have availed it. You can keep borrowing and repaying your money as long as the bank is willing to offer such overdraft facility to you.