What are savings accounts? What is your current banking account? Both bank accounts are great options for people/. The choice between a savings account and a current account is based on the need and preferences of people.
A savings account is a deposit account at the bank on which the interest is earned over time. A current account is a demand deposit bank account that allows the business to perform several transactions.
To make it easier for you to understand the current account Vs savings account, we cover the complete information in this article on both accounts.
Meaning of savings account
A savings account is an interest-earned deposit held at a financial institution or bank. The balances in a savings account will be earned at a good interest rate with time. The best thing about the savings account is the reliability and safety offered, which makes this account a great option to store your money in it.
Meaning of current account
The current account is a demand deposit bank account that allows the number of withdrawals to be made in a day based on the balance in the account. You can easily use the current banking account in your business effectively to make several daily transactions.
There are no limits on deposits, withdrawals, or contra transactions, with your current account. Current accounts also facilitate the internet and mobile banking services to account holders to bring convenient experiences.
Current account Vs savings account
Many people are confused between the two types of banking accounts, current accounts, and savings accounts. Both of the account options are different. To understand the difference between both banking account options, you should read the following facts.
- Purpose
Businesses use Digital Current accounts, traders, service companies, corporate sectors, etc., to handle the high volume of transactions. A savings account is a great option for individuals who want to use the deposited income later to pay bills, etc.
- Interest
In the current account, interest is not payable except in a particular case to terms and conditions of the scheme under which this account is open. On the other hand, the savings account pays the interest on your deposited money. Interest is also calculated on the outstanding balance.
- Overdraft facility
An overdraft facility is not available in the current account. Some savings account schemes provide an overdraft facility to account holders.
- Withdrawals
You can easily make the number of withdrawals based on the balance kept in your current account. But the savings account has transaction limits per day for account holders. A savings account’s transaction limits of Rs 50,000 per day allow cash withdrawal.
Conclusion
Both the banking account, current account, and savings account different target kinds of customers who have different requirements. Businessmen open the current account because they need to handle many transactions frequently.
On the other hand, a savings account is a great option if you want to earn good interest on your deposit in a bank account.