Difference between a savings account and a current account

Difference between a savings account and a current account

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What is theĀ difference between a current account and a savings account? The two best types of bank accounts beneficial for people are savings accounts and current accounts. Savings accounts are used by people to keep their savings safe, whereas current account is used by businesses to handle their hassle-free transactions, deposit, and withdrawals.

Both accounts are used for different purposes. There are many differences between a savings account and a current account. Let us help you to understand the Difference between a savings account and a current account.

What is a current account?

A current account is considered a deposit account that is used by a business that wants to make many transactions regularly. This type of account allows daily and smooth transactions with no interest ability.

What is a savings account?

A savings account is a popular bank account that allows you to deposit and withdraw money at the same time if required. This account keeps your savings or hard-earned money safe. The best thing is that a savings account allows you to earn interest on your savings.

Features of current account

  • Current accounts can make hassle-free day-to-day transactions, deposits, and withdrawals.
  • The current account does not pay interest over deposits, but some banks pay interest on current accounts.
  • The current account has come with an overdraft facility.
  • It is required to have your KYC documents to open your current account.
  • There are no limits on the number of deposits or withdrawals from your current account.
  • The current account has continuous nature. It means these accounts do not have fixed tenure while using.

Features of savings account

  • There are no restrictions applied on savings accounts on depositing or withdrawing money from them.
  • It is important to maintain the minimum monthly balance in your savings account.
  • You can operate your savings account as long as you want, which means there are no limits on managing your savings account.
  • An overdraft facility is not available in the case of a savings account.
  • A savings account helps you to adopt savings habits.
  • Overdraft facilities do not come with a savings account.
  • Savings account holders get online banking and debit facilities to make transactions regularly.

Type of current account

Current accounts are available in various types. The different type of current account allows the business to choose the specific type that meets their business needs.

  • Standard current account
  • Premium current account
  • Packaged current account
  • Foreign current account
  • Sole prop current account

Types of Savings Accounts

  • Salary savings account
  • Family savings account
  • Minor and children’s savings account
  • Zero balance savings account
  • Senior citizen savings account
  • Women savings account

Conclusion

The eligibility, features, and benefits of current and savings accounts are different. When you choose a savings account, you can earn interest on your savings. If you choose a current account, you can make several transactions in a day within your business.

Finance