Difference Between Current Account and Savings Account
17 Oct 2022
Table of Content
Savings Account Meaning
A savings account is an interest-bearing deposit account held at a bank or other financial institution. Though these accounts typically pay a modest interest rate, their safety and reliability make them a great option for parking cash you want available for short-term needs.
Current Account Meaning
Current account means a form of Demand Deposit where from withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount.
Having a bank account is essential for modern-day living. You need it to receive and make payments, and there are very few transactions that do not require a bank account. Of course, cash is still king in India for large sections of the population, but the number of those people is steadily declining. Besides, Internet banking has made banking so much more convenient, allowing people to carry out most transactions online, without the need for messy paper bills and cheques.
The majority of bank customers open either a current account or a savings account. Some people get confused between the two terms and are unable to tell the difference between current account vs savings account. Of course, these are very different, and it’s important for you to understand what is the difference between current and savings account? Here are some of the differences:
Difference Between Current Account and Savings Account
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Current a/c |
Savings a/c |
|---|---|---|
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Purpose: |
A current account is intended for those who do business, like shopkeepers, traders, companies, and service organisations. Generally, the volume of transactions in a current account is very high. |
A Savings Account, on the other hand, is meant mainly for individuals, who deposit their salaries/ income in the account and use it to pay their personal and household bills. |
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Interest: |
Interest is not payable in current accounts, except in specific cases subject to terms and conditions of the scheme in which the account is opened. |
Savings accounts pay moderate interest. Interest is calculated on the daily outstanding balance. However, the interest earned is credited to your account not daily but every quarter or half year. For more details visit our official page of - Deposit Interest Rates |
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Overdraft facility: |
Overdraft facility is not available. |
Some saving schemes offer overdraft facility (*T&C apply ). |
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Withdrawals: |
Withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount.
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Per day per transaction limit of 50000 /- is fixed for cash withdrawal by drawer by self-cheque (through withdrawal up to ` 25000/- - SB Account without cheque book facility) at Non Base CBS branches irrespective of nature of accounts. Passbook should accompany with Withdrawals. |
To sum up, the difference between current and savings account is that they target different types of customers, who will have different needs. A businessman will open a current account because his need is mainly for liquidity to handle huge volumes of transactions. An individual who opens a Savings Account, on the other hand, won’t feel the need for a large number of transactions and may want to earn some interest on the amount deposited.
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The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
How To Open A Savings Account
A savings account is perhaps the first interaction a person has with a bank. It is the most basic of bank accounts. It offers the safety that a depositor looks for, plus interest rates and the flexibility of withdrawing money anytime and anywhere.
Documents Required for Savings Bank Account
A leading bank like Bank of Baroda offers a bouquet of savings accounts that you can pick from to park your salary and income from other sources with, while earning some interest based on the type of bank account you choose to open.
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