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5 Differences between a Current Account and a Savings Account
Posted on Wednesday, January 11th, 2023 | By IndusInd Bank
If you are wondering what is the difference between a current account and a savings account – after all, they are both bank accounts, you are not alone. A lot of us still don’t know the correct answer. To put it in laymen’s terms, a current account is meant for businesses, and a savings account is meant for salaried individuals looking to save money. However, there is a lot more to these accounts.
Today, we will explore what is a current account and what is a savings account. We will also dive through the differences between both the accounts so you can select the one that best matches your banking needs.
What is a current account?
A current account is a non-interest-bearing deposit account designed to facilitate frequent & high-value transactions. These accounts are usually held by business owners, small to medium scale enterprises & large corporates as they offer higher cash deposit limits than other accounts. Since these accounts are heavily operated, they also require a higher minimum balance as compared to savings account. A Penalty may be charged if the minimum balance of the current account is not maintained.
What is a savings account?
As the name suggests, a savings account is the most basic type of account maintained by any individual who aspire to save money. It is a great way to park your extra funds and earn a fixed interest income on it. Unlike other investment products, savings account is more liquid in nature so you can access your money whenever you require it. Apart from interest income and easy access to money, savings accounts also offer shopping deals, discounts and cashbacks on different brands.
5 differences between a current account and a savings account
Let’s take a look at how the purpose, facilities, customer base, etc. of a current account are different from that of a savings account:
1. On the basis of purpose
| Current Account | Savings Account |
|---|---|
| By now, you must have understood the purpose of both the accounts. The purpose of a current account is to enable account holders to carry out business transactions properly and promptly. This includes making direct payments via cheques, demand-drafts or pay-orders, etc., making high-value transactions on frequent basis, making bigger deposits than other types of accounts. | The purpose of a savings account is to help account holders reach their financial goals. It provides steady interest income along with easy access to money. With a savings account, you can send & receive payments, pay credit card bills, pay utility bills, make investments, etc. |
2. On the basis of customers
| Current Account | Savings Account |
|---|---|
| Due to the type of services it offers, a current account is an account is mainly opened by businesses – such as proprietorships, partnership firms, public and private companies, trusts, association of persons, etc. | A savings account is generally opened by earning individuals with steady monthly income, looking to save money and reach their financial goals. |
3. On the basis of interest earnings
| Current Account | Savings Account |
|---|---|
| As mentioned earlier, a current account does NOT offer interest income to account holders. Current accounts are heavily operated accounts due to which banks incur a huge operational cost. Offering interest income on these accounts will increase this cost exponentially. | Interest income is the salient feature of a savings account. This interest amount varies from bank-to-bank and from one variant to another. The interest income is generally credited quarterly, or on a half-yearly basis. IndusInd Bank Savings Account offers attractive interest rate along with BIG discounts & exciting offers! |
4. On the basis of offerings
| Current Account | Savings Account |
|---|---|
| The most common offerings across all current accounts are – overdraft facility, frequent high-value transactions and high cash deposit limit. Overdraft is one of the most beneficial features of a current account. It means that the account holder can withdraw money even if the account balance is zero. This amount can be paid back to the bank with nominal interest charges. | A savings account is a great way to get periodic return on your money while making sure it is accessible to at all times. Additionally, the savings account interest income also enjoys tax deductions under certain sections offered by the Income Tax Department to promote savings and investment sentiments. |
5. On the basis of account opening procedure
| Current Account | Savings Account |
|---|---|
| To open a current account, businesses are required to submit documents such as certificate of incorporation, memorandum of association for companies/trusts, Job card issued by NREGA, and lots more. Thankfully, you can open a paperless current account from anywhere, anytime with the All-In-One Indus Merchant Solutions App. | The documents required to open a savings account are different from the ones needed to open a current account. To open a savings account with IndusInd Bank, all you need is your PAN and Aadhaar card. You can open an account from the comfort of your home with video KYC and start earning interest on your account balance instantly! |
Get best-in-class current account and savings account with IndusInd Bank If you are a business owner, or planning to start a new business, you should opt for IndusInd Bank Current Account. With us, you can choose from a range of industry-specific accounts that offer premium banking facilities.
If you are an earning individual looking to grow your savings, you can open a savings account with IndusInd Bank in minutes and start enjoying competitive interest income on your earnings. So, what are you waiting for? OPEN IndusInd Bank Savings Account NOW!
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author 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.
