Savings Account vs Current Account- What’s the Difference Between them?

Today, banking plays a vital role in money management. Everybody, from a salaried individual to a student, has a bank account. One of the major benefits of having a bank account is that the money remains not only safe with the banker but also has a savings space where you can deposit money every now and then. So, in this article, we will be briefly talking about the differences and benefits of a savings account vs current account. So, keep reading the article till the end to know more.

What is a Savings Account?

Folks, before we give you a brief difference between savings accounts vs current accounts, it is important to know them individually. A savings account is the basic type of bank account which is owned by most of the people. It acts as a safe storage space where one can deposit money and withdraw it anytime they want while earning a minimum amount of interest. When you are looking to open a bank account, you can search through a number of banks where the savings account interest rate varies from 4% to 6%. This is the average interest rate that is earned on deposits in a savings account. 6% is considered to be the highest percentage of the interest rate that is usually offered by banks or any other financial institution.

One can easily open a bank account either individually or jointly, and it will require the account holder to keep a minimum deposit in their salary savings or in their regular savings bank account. This is done to keep the account operational and avoid any kinds of extra cost. But there is an option for zero balance account for women, minors, and older people and they can opt for this option where they will not be required to keep any kind of minimum account balance as well.

Now that you all have a brief understanding of the savings account. Head to the next section of the article, where we discuss in detail the meaning of a current account.

What is a Current Account?

This is a type of bank account that is particularly meant for people who have a business and make day-to-day transactions. Usually, a current account is opened by business institutions as these types of accounts are easier to deal with everyday transactions. These institutions include LLPs, firms, sole proprietorships, partnership firms, and many others. Also, there are fewer restrictions in a current account as compared to a savings account when it comes to the number of cash deposits and withdrawals. A current account offers significant liquidity to its users, which is not the case with a savings account.

When you open a current account, you are not liable to pay any interest on the deposits that are made. Also, a current account can be used for cheques as well as electronic transactions, similar to a savings account. When it comes to keeping a minimum balance in a current account, the bank does not specify any such amount, as the amount in a current account is subject to fluctuations. It solely depends on the nature of the business and the cash needs.

It is now time to look at some of the differences between savings account vs current account. Head to the next section of the article to decode some of the differences.

Savings Account vs Current Account- Differences:

If you want to explore some of the differences between savings account vs current account, then read this section of the article carefully to learn about some of the interesting differences:


When it comes to the balance in a savings account, you are required to maintain a minimum balance in your account apart from the zero balance policy. The amount of money to be kept in a savings account is nominal. In the case of a current account, the users will be required to keep a larger amount of balance as compared to a savings account

When it comes to the money range to be kept in a savings account, it ranges from Rs. 1000 to Rs. 5000. There are many other current accounts that one can open, which are variably dependent on the category of the current account along with the bank that you are opting to open your account in. You can open a current account with a minimum balance of rs. 10000, and another account, you can keep an amount minimum of Rs. 5 lakh


There is another key difference between a savings account vs current account. One must identify the purpose of opening an account. Once you determine your needs, you are all set to open an account in the bank. A savings account is basically designed and made to encourage individuals to save, and a current account is usually opened by individuals who own a business. These accounts help in the smooth transaction of everyday monetary deposits and withdrawals. A savings account will be ideal if you want to save money or make limited transactions. You can also track your monthly expenditure with a savings account. However, with a current account, you will not have limited transaction restrictions and need not maintain a minimum account balance. When you are running a business and want to carry out multiple transactions, every current account is the ideal account for you


This is another point of difference when it comes to savings account vs current accounts. In a savings account, the interest is levied on the deposits to all the customers, and the interest rate is not high. Usually, the interest rate is 4.5% per annum on the deposits within your account. The interest is calculated on a daily outstanding balance, and the interest that you have earned is paid by the bank after a tenure of every 3 months or 6 months, depending on the bank.

In the case of a current account, there are fluid transactions as the account is primarily for the business. The deposits are not entitled to earn any interest. But there are sweep-in facilities that some banks offer, and once you reach a certain limit of funds. In that case, the amount gets transferred to a fixed deposit and is liable to earn an interest.


This is a notable difference in savings account vs current account. The savings account users will get a specific number of free withdrawals, and the bank will charge some amount of money when they cross the limit of free transactions. But in the case of a current account, the users can carry out effortless transactions as they are for business.

Why A Savings Account?

  • In this section, we will be dealing with some of the benefits of a savings account. They are:
  • A savings account facilitates the savings process. The sole purpose of opening a savings account is to deposit money that will serve as a long-term investment. It also motivates you to save money and make frequent deposits once you see your money growing
  • When you are opening a savings account, you can open it with a small amont of money as well. You need not have to maintain a huge amount of balance to sustain your savings account

Why A Current Account?

Some of the benefits of a current account are:

  • When you open a current account, you can make unlimited transactions. There are no limited transaction restrictions, as seen in the case of a savings account. You will not be charged extra for making withdrawals
  • The current account will help you to boost your credit score. With a current account you can significantly manage the inflow as well as outflows efficiently. This will prove to improve your creditworthiness significantly.


Folks, these are some of the differences and benefits when it comes to savings account and current account. These points of difference between them help us to gain a greater insight into savings accounts vs current accounts. So, when you open a bank account the next time, look at these differences for a clearer idea. That’s all, folks. I hope the article will help you to get all the information you need.

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