Difference Between Savings and Current Account in India
In India, savings accounts and current accounts are two types of bank accounts that are commonly used. While both accounts offer a variety of essential banking services, they have different features, requirements, and benefits. This article aims to highlight the difference between savings and current accounts in India.
Savings Account
A savings account is a type of bank account that is designed to help individuals save and earn interest on their money. This account is suitable for people who want to keep their money safe and earn some interest on their savings. Here are some key features of a savings account:
- Minimum balance requirement: Banks in India require a minimum balance to be maintained in a savings account. The minimum balance requirement may vary depending on the bank.
- Interest rates: Banks in India offer interest rates on savings accounts. The interest rate may vary depending on the bank and the balance in the account.
- Withdrawals: Savings accounts usually have limitations on the number of withdrawals that can be made per month. Banks in India may charge a fee for exceeding the withdrawal limit.
- ATM cards: Savings accounts come with ATM cards, which can be used to withdraw money from ATMs and make purchases.
Current Account
A current account is a type of bank account that is designed for businesses, companies, and individuals who need frequent transactions. This account is suitable for people who frequently make large transactions, such as businessmen and companies. Here are some key features of a current account:
- Minimum balance requirement: Banks in India require a minimum balance to be maintained in a current account. The minimum balance requirement may vary depending on the bank.
- Interest rates: Current accounts do not usually offer interest rates on the balance in the account.
- Withdrawals: Current accounts have no limitations on the number of withdrawals that can be made per month.
- Cheque books: Current accounts come with cheque books, which can be used for making transactions and payments.
- Overdraft facility: Current accounts come with an overdraft facility, which allows account holders to withdraw more than the available balance.
Conclusion
In conclusion, savings accounts and current accounts serve different purposes and are suitable for different types of account holders. While savings accounts are suitable for people who want to save and earn interest on their savings, current accounts are geared towards businesses and individuals who have frequent transactions. Understanding the differences between these two accounts can help you choose the right type of account that suits your needs.
Table difference between savings and current account in india
Difference between Savings and Current Accounts in India
| Features | Savings Account | Current Account |
|---|---|---|
| Interest | Usually earns higher interest | Does not earn much interest |
| Minimum Balance | Has minimum balance requirement, which varies from bank to bank | Has higher minimum balance requirement, as it is primarily used for business purposes |
| Transaction Limit | Limited number of transactions per month | No limit on number of transactions |
| Overdraft Facility | May have overdraft facility, but at a higher interest rate | Allowed to have overdraft facility for business purposes |
| Cheque Book | Issued with a limited number of leaves | Issued with a higher number of leaves, as it is primarily used for business purposes |
| Usage | Primarily used by individuals for personal banking purposes | Primarily used by businesses for transactions and payments |