Current account vs savings account know the difference

Know the difference between a current account and a savings account

At times, you may need to make multiple payments, receipts and other transactions, as traders and entrepreneurs like you do. They prefer to use a current account to access the account frequently. But what is a current account and how is it different from a savings account? Here is a list to help you understand the difference between a current account and a savings account:

Meaning

A savings account is a deposit account that allows limited transactions, while a current account is meant for daily transactions.

Suitability

Savings accounts are best suited for people who are salaried employees or have a monthly income, while current accounts work best for traders and entrepreneurs who need to access their accounts frequently.

Interest

Savings accounts earn interest at the rate of around 4%, while current accounts do not earn any such. A current account is actually a non-interest bearing deposit account.

Overdrawing

When you withdraw more money from the account than what is actually present in it, your account is said to be overdrawn. In case of savings accounts, banks neither offer nor allow overdraft facilities, while this facility is provided with current accounts.

Minimum Balance

The minimum balance required to maintain a savings account is usually low, but in case of a current account, it is much higher.

This should make the difference in the purpose and function of a current account and a savings account clear.

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Know the key features of a savings account here.

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