Difference between Savings and Current Account

Many people get confused while withdrawing money from ATM when they see the options "Current Account or "Savings Account".

They both are different type of accounts offered for different purposes. Now, let us know the basic difference between savings account and current account.

Savings Account

As the name indicates, this account is meant for saving purposes. Any individual either single or jointly can open a savings account.

In these accounts one has to maintain minimum balance as low as Rs 1000/ in some PSU banks while it is Rs 10,000 and above in private sector banks. In savings account number of financial transactions are restricted. 

Interest rates are higher when compared to current account. Any cash transactions of Rs 10 lakhs and above in a year will be informed to the IT department.

In case, if you do many cash transactions and issuing of cheques in a savings account, banks have all the right to question you on the income and reason for transaction.

Current Account:

Current account is mainly for business persons, firms, companies, public enterprises etc. This is useful when a person does a  number of business transaction on daily basis.

While, there is no interest paid on amount held in the account, there is no limit on number of transaction.

In case of ATM withdrawal if you have a salary account or zero balance account you should opt for the savings account.

Here  are the key differences between these two accounts, savings account and current account.

	Savings Account	Current Account
Purpose	To encourage saving	Many transaction
Ideal for	Salaried person	Business person
Minimum Amount	Less amount	Higher amount(depending on the bank)
Interest Rates	4% - 6%	Normally, no interest is paid
Over Draft	Not Allowed	Allowed