Difference between Current Account and Saving Account

Difference between Current Account and Saving Account

From the very young age every elder and older in our family, tell us the importance of saving money.

There is often used quote about savings,

“Save money and money will save you.”

We all try to save money as much as possible. So that this saved money will serve us in future.

In our childhood, we all have piggy banks where we put our savings. We all save money for the future. These savings provide security and must helpful in financial emergency.

In the olden days, everyone keep their money in lockers at home. But sometimes it is very complicated and highly risky to manage money.

For overcoming such problems, banking sectors spread all over the world. For deposit and withdraw money, save money, getting interest on it and for transaction uses, all these can’t be possible without banks.

Bank is the safest place to secure money. In a modern day, having a bank account is necessity. It has so many benefits. And also now days the procedure for opening a bank account is very easy and fast.

Majority of people have either a saving or a current account. These two accounts have their own benefits and requirement. Every Bank offers two types of accounts based on the customer’s preference:

  • Saving Account
  • Current Account

Saving Account

Saving account is meant for the personal savings. It allows a bank customer to save and earn interest on the saved money.

Purpose of saving account is to encourage customers for savings. Anyone can open the saving account with the Aadhar card (for verification).

Types of Saving Account:-

As per requirements, customer’s preferences and different purposes, there are so many types of saving accounts to fulfil their choices and benefits:

  • Regular Saving Account:

It is saving account which allows account holder to deposit money anytime. You have to maintain minimum balance in the account and at the end of the year you will get interest on its balance. If the total amount in your account is less than the minimum balance then you may have to pay penalty.

  • Salary Saving Account:

This kind of saving account opens by the organisation where every month the organisation deposits salary in the employee’s account. These are opened by the company or organization for the convenience of employees.

  • Zero Balance Saving Account: These are the saving account which can open with zero balance. It means we don't have to pay a single rupee for account opening. And in case of zero balance and deposit, there is no penalty on the account holder.

Zero balance account can be open and manage with zero balance.

  • Specific Saving Account: This type of saving account is mainly for minors, senior citizens and women. Such accounts offer so many facilities to the customers. For the security of minors and senior citizens, these accounts have high interest rate. Bank also offers high fixed deposit interest rate, free life insurance and lot of exclusive offers.

Benefits of Saving Account:-

  1. We can open saving account individually (only one person is account holder) and jointly (two or more people are account holder) as well.
  2. In saving account, the return on the investments is good. The interest rate is start from 0.50% to 7.50% (it depends on different banks).
  3. If account holder maintains a minimum balance in their account, so mostly banks also provide 15 to 30% discount on locker fee.
  4. Some banks also provide medical insurance and life insurance, if you open saving account in their bank.
  5. In saving account, bank also provides you Debit Card and for overseas transaction, this card can be turn into International Debit Card.
  6. In saving account, there is no need to frequent deposit.
  7. In saving account, some banks also offers free net banking, debit card, loan benefits, passbook, cheque book, online fund transfer and mobile banking to the account holder.

Limitations of Saving Account:-

There are certain limitations of saving account. And also some exclusive facilities, that saving account do not offer. Some drawbacks of saving account are given below:

  • There are certain limits on number of transaction in several months. If you perform more transactions than the limit, you have to face issues.
  • Saving account also have limits on withdrawal via ATM. You can’t withdrawal huge amount at a time from your account.
  • These accounts do not have the facility of overdraft.
  • To depositing huge and frequent amount in account, it may be problematic for you. In this case bank might be inquiry to you.
  • If your saving account is not providing competitive interest rate on investment, then due to inflation it might reduce the value of your money.
  • In case your account balance is less than the minimum balance, then bank will automatically deduct the fees as a penalty from your account.

Current Account

It is the account which opens by a firm, business organization, and companies. Current account is used for frequent transaction, or transaction on almost regular basis.

The basic purpose of current account is for business. That’s why current account is also known as Business Account or Checking Account.

For a businessman, who has to transact a huge amount on a regular basis, they use current account instead of savings account.

Types of Current Account

Although there are so many types of current account, yet it is divided into four main categories. Let’s discuss one by one:

  1. Premium Current Account

As it clear with the name, it is made of array of money transfer. It is suitable for exclusive holders (that’s why it is called as premium account) who are planning for high transactions.

  • Standard Current Account

It is basic money deposit account with the zero interest rate. It is highly suitable for small businesses. Standard account offers free net banking, SMS services and also allows 24*7 free RTGS and NEFT transactions.

  • Foreign Current Account

This type of business account is used by the traders, who have to perform international transactions.

It is highly beneficial for the sending and receiving finance from foreign countries.

  • Packaged Current Account

This type of account lies in between the premium and standard current account. It is little bit down in compared to premium account and more beneficial than the standard account.

Packaged current account also offers exclusive packages like accident insurance and travel insurance along with all the bank facilities.

Features of Current Account:-

These account are manage by the firm Current account allows you to frequent transaction without any restrictions and formalities.

  • In current account, it is necessary to maintain a minimum balance. If account holder is unable to maintain, they will have to pay penalty.
  • You can’t make money via interest on your deposits in checking account due to the fluent transaction.
  • There are no limitations on number of transactions.
  • If you run a small business, then current account is beneficial for you.
  • It allows holder to make payments in the form of cheques easily and for a businessman this is often procedure of transaction.

Difference between Current and Saving Account:-

Although both of these are regular account which is very common in use yet there are some key differences between them:

The basic purpose of saving account is to save money. On the other hand the purpose of current account is to spend or transfer money.

Current Account vs Saving Account

Here is the comparison table that help you to understand the key differences between them:

Basis of distinguishSaving AccountCurrent Account
NatureThe nature of saving account is deposit.Current account has nature of transaction.
PurposeThe policies of these accounts have made to promote savings.The purpose of current account is to spend money via transactions.
LimitationsSaving accounts have limits on monthly transaction.There is no limit on the number of transaction in current account.
Made forThis account is made for individuals.Checking account is preferable by organization.
Interest RateSaving account offers interest rate from -0.50% to 7.25%.On the other hand, current account has no facility of interest. There is zero interest on deposits.
Minimum BalanceThe amount for maintain minimum balance is comparatively low.The minimum balance amount is high.
SecuredThese are highly securedoption for emergency due to offeringinterest. This is the best options for senior citizens and minors.Current account is not made for them who want a safe and secured option for deposit money.
Overdraft FacilityOverdraft facility in saving account is not available.Current account offers overdraft facility.
Used ForThis account is used for business transactions and paying bills.They are usually used as salary account.
Preferred BySaving accounts are the first choice of salaried employee and senior citizens.These accounts are preferred by individual businessman and organisation.
Additional FeaturesThese types of accounts offer account opening with zero balance and satisfactory interest on fixed deposit for minors and senior citizens.These accounts help in foreign transactions, minimum tax cutting and few banks also provide travel insurance.


Both of these accounts, saving and checking account have their own pros and cons. It depends on the public preferences, public interest and the certain purpose behind account opening.