Difference Between Current Account And Savings Account

Created on 21 Nov 2020

Wraps up in 5 Min

Read by 4.4k people

Updated on 28 Dec 2022

difference between current account and savings account

How do you save money? Considering the techniques of the olden days, keeping a large amount of money with you or in a steel locker in a house might be risky, or saving money on a daily/weekly/monthly basis by distributing it, might be hectic to manage on your own as it takes a lot of time. So, is there any alternative solution? Where do I keep my money if not in my house? How can I manage the timely savings of my money?

Providing solutions to such problems, every bank offers two basic types of accounts to its customers, depending on their preferences. Savings account and Current account are two types of accounts that are offered by the banks, and these accounts can be opened both through online and offline modes. Banks offer online banking systems to account holders.

To understand the basics of savings account and current account, let's briefly discuss them and see what they offer to their account holder

Table of Contents

  What is Savings Account?
      * Features of a Savings Account
  What is Current Account?
      * Features of Current Account
  Difference between Current Account and Savings Account
  Final thoughts

Meaning of Savings Account

A savings account is the most basic account that can be opened at any bank in the country. As the name is very self-explanatory, a 'savings' account allows an individual to deposit their money safely within the bank so that the individual does not have to keep all the money with themselves or have to save it on their own.

One major added benefit of this means of savings is that the account holder of a savings account also earns an interest rate from the bank. Depositing money in the bank is a safe way to avoid robbery and many other crimes related to money.

The account holder can withdraw the deposit amount at any time from the bank or ATMs. The process of opening a savings account can be done in both online and offline modes. In the online mode, the account holder can do transactions, bill payments, mobile recharge, etc. with internet-enabled devices like smartphones, tablets or laptops.

But why should one keep a savings account? Let's understand this with an example.

Suppose, two brothers Prashant and Pravin received Rs. 10,000 each from their parents as their yearly pocket money. Prashant opened a savings account and deposited his money in the bank whereas Pravin spent all his money. After a year, Prashant had total money of Rs. 10,500, which included the interest rate paid by the bank, as he had deposited his money in a savings account. Whereas, Pravin was left without any money as he did not bother to save.

That is why every individual needs a savings account so that they can save some amount of money for their future purpose. Opening a savings account with a bank is a better option than saving it personally, as banks offer a safe depository and also provide some rate of interest on the deposited amount.

Features of Savings Account

  • In a savings account, the bank manages an individual's savings, expenses, and investments.
  • Government banks offer a 3-4% interest rate to their depositors.
  • The private bank offers a 6-7% interest rate to their depositors.
  • Interest is variable since it can be changed accordingly and calculated on a monthly basis but paid every quarter.
  • The account holder needs to maintain monthly or quarterly minimum balance requirements in their accounts. The minimum balance requirements are usually quite low depending on the bank.
  • Zero bank accounts can be opened wherein the holder does not need to maintain a minimum balance requirement. Salary accounts, student accounts, approved societies accounts, etc., are examples of Zero Savings accounts.
  • Cheque books and debit cards are offered to depositors.
  • A minor under a guardian can also open their savings account.
  • Indian and Non-Resident Indian can also open a savings account.
  • The savings account offers a limited deposit amount and transactions in a day.

What is Current Account?

Current accounts are more popular among big companies, firms, businessmen, etc. The current account is used by those who make frequent or regular transactions with the bank.

For people and businesses who have to indulge in cash transactions every day, it is very difficult to maintain huge cash reserves with themselves and do all the transactions on their own. This can be risky and hectic to manage (not to mention can also end up formulating errors as humans are not modified machines).

The current account can handle large transactions systematically, which is why this account is preferable for all the business transactions. In the current account, account holders do not get any interest rate from the bank.

However, the current account offers many features that savings accounts don't. Let's take a look at them.

Features of Current Account

  • Current accounts manage individual business transactions.
  • Current accounts offer a 0% interest rate to their depositors.
  • Depositors/Account holders need to maintain the minimum monthly/quarterly balance requirements.
  • Account-holders can make unlimited transactions per day; there are no limitations.
  • Overdraft Facility is also available in the current account.
  • Cheque books and ATM cards are also offered by the bank.
  • Online Banking is also provided to the individual from where they can make transactions, bill payments, etc.

Current Account Vs Savings Account

The current account and savings account are meant for different purposes and thus, have some significant differences between them.

Let's explore the finer differences:


Savings Account

Current Account


A savings account is a deposit account in which account holders keep their savings and earn interest rates.

This account is mainly used for daily transactions.

Ideal For

This account is ideal for salaried employees, students, or people who earn regular (most commonly, monthly) incomes.

This account is ideal for businessmen, companies, firms, or individuals who frequently make transactions on a daily or weekly basis.

Interest Rate

The account holder earns a 3-4% interest rate.

The bank does not offer any interest rate to the account holders.

Overdraft Facility

Banks do not provide any such facilities to the savings account holders.

This facility is available for current account holders.

Minimum Balance Requirement

The minimum required balance to maintain the account is usually lower in a savings account.

The minimum required balance to maintain the account is higher compared to the savings account.

Monthly Transactions

Account-holders can only make limited transactions between 3-5 in a month.

There are no limits on transactions.

The Bottom Line

Both savings accounts and current accounts have different features and are meant for different purposes. A savings account is an ideal choice for someone who is a salaried employee, and for someone who makes frequent transactions on a daily/weekly basis, a current account will be ideal.

Selecting the account completely depends on the individual's preference and goals which must not be casually dealt with, as it might lead to serious repercussions of not having any saved fallback choices (saved money). Therefore, the selection of the right bank account is as crucial as any other step within the financial market.

comment on this article
share this article
Photo of Divyanshu Kumar

An Article By -

Divyanshu Kumar

61 Posts


39 Post Likes


Divyanshu did his post-graduation in Financial Economics, and that's when he realized that writing about finance interests him the most. He has been writing finance content for two years and considers himself a coherent and confident writer. As a Finance content writer, he reads a lot about the subject and makes sure he is up to date with the latest updates in the market. Besides that, he is passionate about fitness and works hard to maintain a healthy lifestyle.

Topics under this Article

Share your thoughts

We showed you ours, now you show us yours (opinions 😉)

no comments on this article yet

Why not start a conversation?

Looks like nobody has said anything yet. Would you take this as an opportunity to start a discussion or a chat fight may be.

Under Invest

"A few" articles ain't enough! Explore more under this category.

Share this post
share on facebook


share on twitter


share on whatsapp


share on linkedin


Or copy the link to this post -

copy url to this post