Difference between current account and savings account

Banking & Finance

There are various kinds of bank accounts that are opened for several purposes with different rules and policies. While opening or choosing an account, we need to read the choosing account benefits and reason for existence with all merits and demerits. Here we will discuss today a banking topic ie. ‘Difference between current account and savings account’, both accounts are run with different motives by the account holders after agreeing to all legal policies and restrictions that are imposed by the RBI. Account holders can be an individual, business partners, business individual, or anyone. 

Current account and savings account are the accounts that can be activated by anyone who is eligible to run their account with the required minimum balance. The account holders should be very active and responsible for their accounts that can manage their finances through bank offerable products and securities. The bank offers various products such as short-term and long-term goals, debit cards or ATM cards, and credit cards.

10 difference between current account and savings account

Here are 6 differences by which it can be proved that current account and savings account are not similar due to different running policies, rules, restrictions that are set by the RBI so that users can maintain smooth transactions without any obstacles. 

Definition of current account and savings account

The Current account is a business account that handles business transactions (outflow process) and a deposit account for the future (inflow process). It is a commercial-based account that is for regular or daily larger transactions. Current accounts can open for a joint purpose, individual, and two partners.

On the other hand, a Savings account is an individual account that handles personal transactions (outflow process) and also a deposits account (inflow process). It is an account that fulfills personal needs after a break or for limited transactions. Savings accounts that are activated for individuals.

Activity of these accounts

The activity of the current account and savings account is normal, no load is necessary to run these accounts, we have a choice of which account we want to open and continue but we need to choose an account according to our activity and motive. If our motive is to save personal funds, then we will go through a savings account and if our motive is to make business transactions, then we will go through a current account.

Current and Savings Funds

Under the current account, current funds are available for business transactions in which larger transactions are made. These funds are saved from business activities.

Under a savings account, savings funds are available for huge purchasing purposes, huge investments. These funds are saved from a regular income that is utilized for future big motives like Downpayment of car, house, building, etc and purchasing an electronic device, investment in gold, vacations, education, and much more.

Required balance

If we are using a current account, then we need to require a higher balance for dealing with higher business transactions, otherwise, we can’t meet to pay business transactions.

If we are using a savings account, then we need to require a minimum balance than the current account for accessing funds. Otherwise, we won’t be able to access money for personal use.


The Current account offers no interest due to the regular inflow and outflow of business transactions. 

Savings accounts offer higher interest (around 3% to 8%) due to the fixed amount in the account. It is charged on personal savings. The Interest rate is levied according to the fixed interbank rate. 


The Current account is suitable for business transactions that are needed for every businessman, public and private entrepreneur.

The Savings account is suitable for personal savings or personal transactions that are used in fulfilling emergencies.

Transaction limit

Both accounts have a transaction limit, meaning account holders have a limit to access money for spending and saving.

The Current account has no transaction limit due to business-related accounts. In a business account, transactions can’t be stopped, it involves a daily transaction.


Overdraft represents an over transaction or over withdrawals that are done by the account holders. 

Current accounts charge no fees on overdrafts, over withdrawals, or over deposits.

Savings accounts charge fees on overdrafts, over withdrawals, or over deposits.

Product facility

Whether the current account or savings account, products are offered for both account holders. Products such as ATM cards or Debit cards, and Credit cards. These card facilities are provided by the bank to raise money through digital processes like PayPal. As well as loan schemes are also offered by the banks to their users so that account holders can improve their financial stability.

Account holders types

Current accounts can be accessed by a business owner, public or private entrepreneurs, social trustees, corporations, etc.

Savings accounts can be accessed by an individual or joint purpose who can allow their monthly salaries and allows them to save for huge investments.

Which account is more beneficial – Current account or Savings account?

Both accounts are beneficial for their opening reasons, so we can’t decide which is best but we can define both account benefits for users. By reading the article, you will know the difference between a current account and a savings account.

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