Primarily, there are two types of accounts in the bank – savings account and current account.
A current account is a kind of deposit account designed especially for businessmen for carrying out their business. This account is made to cater to the needs and requirements of organisations that handle liquid deposits.
A current account offers unlimited fund deposits and withdrawals per day and does not put a limit on the number of transactions. On the other hand, a savings account is made for all individuals to deposit their savings in the banks. Unlike current accounts, you earn interest on your deposits in the savings account.
As these two accounts seem like polar opposites of each other, let’s learn about their differences. So you can decide if you want to open a current account or a savings account with a bank.
If you are beginning your first job or firm and are curious to know which account will be the best fit for you, then please read this blog further to make a decision. To make it simpler for you, please note that the decision will solely depend on your banking needs and requirements. The two most popular accounts with the banks are savings accounts and current accounts.
What is a savings account?
A savings account, true to its name, is meant to save your deposited money for the long term. Let’s take a look at some of the most significant offerings of a savings account-
- You enjoy the benefits of fixed interest on your savings in the savings account.
- The minimum balance requirements in a savings account are considerably lower compared to a current account.
- Overall, there are fewer charges as compared to a current account.
What is a current account?
A current account is an account dedicated to carrying the business where liquid transactions are involved. Let’s take a look at some of the most significant offerings of a current account-
- The primary use of a current account is to make seamless transactions.
- Current accounts come with facilities like overdrafts (OD) and limitless deposits and withdrawals every day.
- Availability of other credit and cheque facilities to make business transactions easier.
- You can also open current account online.
What are the differences between a savings account and a current account?
You can earn interest on the deposited money in a savings account.
You earn no interest on the deposited money in your current account.
You pay additional charges after exceeding the limit of transactions in your savings account.
You get a limitless amount of transactions in your current account.
Both savings and current accounts have debit card facilities and can be used to withdraw money from ATMs.
Savings accounts are meant for personal savings. They are used to deposit salaries and money for future use.
But the current accounts are meant for fluid transactions for organisations and businesses. They aren’t meant for savings.
Minimum Balance Requirements:
The minimum balance required in a savings account is low. This is because everyone can afford a savings bank account.
The minimum balance required for the current account is high as they are used for a lot of business dealings.