Savings accounts and current accounts are some of the most convenient ways of storing your funds, wherein you can add deposits or make withdrawals at your convenience. However, they feature a set of differences in their functioning that can help cater to your various requirements.
The following sections talk about what these accounts are, their primary distinctions, and other useful information pertaining to them.
Here is an in-depth look into current accounts vs. savings accounts and their basic features:
This is one of the most basic kinds of accounts that you can open with most banks or NBFCs as it lets you safely park your idle funds. This is considered to be a much better alternative to keeping physical money at home as it helps avoid the risks of loss, damage, and theft, among others.
You can easily withdraw funds from an ATM via a debit card and also benefit from various offers provided by your preferred issuer. Some of the features and benefits of opening a savings account are:
Ideal for all immediate expenses, emergencies or meeting your financial goals
Useful for accumulating and growing your savings over the course of time
Has minor requirements of minimum balance maintenance and certain fees
Current accounts or checking accounts are primarily useful for people who frequently conduct financial transactions. These include entities such as businesspeople, traders, entrepreneurs, firms, and trusts, among others with high transaction volumes.
There are no limitations on the number of transactions or withdrawals that you can conduct or make. Find out some of the features and benefits of opening a current account:
Primarily useful for various financial transactions such as deposits, payments, transfers, withdrawals, and more.
Facilities available in most financial institutions include debit cards, chequebooks, online banking facilities, short-term loans, and much more.
May feature comparatively higher minimum balance requirements and maintenance fees
The following table highlights the some of the major differences between savings and current account:
Particulars |
Savings Account |
Current Account |
Objective |
To promote and encourage long-term savings |
To help make all day-to-day transactions much easier |
Beneficial For |
People with steady incomes, or those looking to fulfil short-term financial requirements, such as vacations, weddings, vehicle purchases, etc. |
People engaged in business, trading, public entities, firms, organisations, etc. |
Earnable Interest |
Provides significant interest on all deposits made |
May or may not offer interest due to its liquidity provisions |
Monthly Transactions |
There are certain limitations on the number of transactions that can be conducted in a month. Exceeding this can result in penalties and other charges |
There are no upper limits or restrictions on the number of transactions that can be conducted in a month. This is because such an aspect is the main purpose of current accounts. |
Minimum Balance Requirements |
Usually requires a comparatively lower minimum balance |
May require high amounts of minimum balance due to its extensive operations |
Overdrawing facility |
Does not feature any overdrawing facility |
Can allow individuals to withdraw more funds than what is available in an account |
While the two types of accounts have certain differences between them, here are some similarities between the two:
Both are designed to help you meet your financial requirements and manage funds better
Opening either a savings or a current account is quite easy and can be done quickly online with minimal documentation
Both accounts feature certain basic features such as debit cards, internet banking, sole and joint account holding facilities, etc.
There is no limit on the amount of funds you can deposit in either a current account or savings account
You will be able to choose between a wide range of account types for both
Now that you have the basics of both a savings account and a current account clear, the next step is to find the right issuer with whom you can open an account. Bajaj Markets offers one of the most convenient ways to create either a current account or savings account and has a variety of features included.
Don’t wait any further and open a current account today!
FAQs
What is better between a Current and Savings Account?
Choosing between a current and savings account is not possible since both of them come with their own set of features and benefits and cater to people based on their varied requirements. For instance, current accounts are ideal for those who conduct transactions on a day-to-day basis, while savings accounts are for those who wish to conserve their funds and earn interest over them.
What is the difference between a salary account and a savings account?
The main purpose of a salary account is to allow companies to credit an employee’s salary into an account, while its savings counterpart is for saving or holding funds with a bank.
Can I open both a savings account and a current account at the same time?
Yes, there is no particular restriction on opening both types of accounts with an issuer at the same time. Both have their own utilities and features and can be useful for varied purposes.
Which type of account provides higher interest on the deposited amount?
Savings accounts are considered to provide more interest on deposits over current accounts since the funds are meant to be stored in them for longer periods than current accounts.
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