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5 differences between current account and savings account       

Primarily, there are two types of bank accounts in India. They are Savings accounts and Current accounts. Both these accounts have different purposes.

If you want to open a bank account for personal use like saving and transacting, then you can open a savings account and earn interest on your funds. If you are an entrepreneur who wants a bank account to meet your banking needs, like carrying out several business transactions daily, then you can opt for a current account.

Before we discover the differences between Savings and Current accounts, let’s take a look at their purposes.

What is a Savings Account?

A savings bank account is the most common bank account that you can set up with the bank. You can deposit your money, use these accounts for saving purposes, and earn interest on the funds.

It is beneficial to have a savings bank account as transactions are moving online these days, and with a savings account, you can do that easily with Internet banking services. You can also opt for a Debit Card with a savings bank account. By doing that, you will be able to withdraw money through ATMs and pay directly at POS machines.

You can earn interest on your deposited funds. The interest rates vary from bank to bank, so make sure to do your research and opt for the bank that provides maximum interest rates.

What is a Current Account?

A current account is like a financial or business account that businessmen use to manage high volumes of daily transactions. This account also offers services like cheque issuance, fund transfers, withdrawals, etc.

If you want to start your business, then you need to open a current account with your preferred bank. Current accounts can be set up by public and private companies, proprietaries, trusts, and more.

How different is a savings account from a current account?

Let’s take a look at 5 differences!

1) Meaning

A savings account is more like a deposit account that enables limited transactions and is meant for personal use, while a current account is meant for businesses and high-volume transactions.

2) Suitability

A savings account caters to salaried individuals who want to deposit their money for savings, while a current account is for traders and businessmen who want to transact for business use.

3) Interest

With savings accounts, you can earn interest on your deposited amount, while you mostly earn no interest in current accounts.

4) Overdrawing

Whenever you withdraw more money than the funds in your account, your account is called an overdrawn account. Savings accounts don’t offer overdraft services. Only current accounts come with overdrawing (OD) facility.

5) Minimum balance

Savings accounts have a low minimum balance. However, current accounts have a higher minimum balance as they are used for carrying out business.

Now you know all the important differences between a savings account and a current account.

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