Difference Between Current Account and Savings Account

Banks offer various kinds of bank accounts and each of them has different use cases. The most common two types are savings accounts and current accounts. Do you want to know the difference between the two and choose the best one for you? Then, read ahead.

Current Account and Savings Account Meaning

You must have noticed businessmen and entrepreneurs mostly have current accounts and salaried individuals opt for savings bank accounts. Have you ever wondered why? Let us try to understand this by getting to know more about each of them.

What is a Current Account?

A current account is mostly held by businessmen or entrepreneurs to conduct daily transactions with ease. This is because there is no cap on the number of transactions that can be carried out per month.

These accounts are not used to store money, and banks also do not give any interest on money parked in current accounts. But holders of such accounts can make use of overdraft facilities, i.e., they can withdraw more money than is present in the account.

Apart from this, a higher minimum balance is required to be maintained as compared to savings accounts. They are also referred to as Checking Accounts.

What is a Savings Account?

A savings account is used mostly by salaried individuals or people who have a steady income. It can be held by an individual or jointly with another person, mostly to save money.

Banks offer interest rates on money parked in such accounts, which can range between 3% to 6% based on the amount and type of account. There is a limit to the number of transactions that can be completed each month, and on surpassing that limit, a fee is charged.

Such accounts do not offer any overdraft facilities and the minimum balance that needs to be maintained is lower as compared to current accounts. 

Difference Between Current and Savings Accounts

Now that you know what a current account and savings account means, let us look at their differences. The following table describes the difference between current and savings accounts - 

Factor Current Account Savings Account


Used for business to make daily transactions

Used to save money for short-term

Ideal for

Business owners and entrepreneurs

Individuals or salaried persons

Number of transactions allowed

No limitation

Limited number of transactions per month

Cheque Facility



Minimum Balance

The minimum balance to be maintained is high

The minimum balance to be maintained is low

Overdraft Facility


Not available

Interest Earned

No interest on funds kept

Around 3%-6% of interest can be earned on funds


The major difference between current and savings accounts is their purpose. One is more fitting for business owners while the other is for personal savings and uses. Both accounts have cheque facilities and money can be withdrawn whenever required. However, savings accounts allow a limited number of cash withdrawals.

The biggest disadvantage of current accounts is that no interest can be earned on funds parked in the account. There are many advantages and disadvantages to both accounts and the end choice is yours.

You can choose to open one of these types of accounts depending on your requirements. All banks allow customers to open both types of accounts, and you can have both accounts in the same bank if you want.

Difference Between Current Account and Savings Account - Related FAQs

The major benefits of a current account include liquidity, as you can withdraw large sums of money as and when required. You can also deposit cheques in any bank branch to receive payments. Apart from this, current accounts also allow overdraft facilities, which may come in handy for entrepreneurs.

Which type of bank account is best for you depends solely on your requirements. If you own a business, a current account might be a good choice for you. But if you are a salaried person a savings bank account would be best suited for your needs.

If you get a monthly salary, a savings bank account will be the best option for you. You will be able to earn interest on the money if you let it stay in your account for a longer duration.

A minimum balance needs to be maintained in current accounts, which is higher than most savings bank accounts. If your account balance goes below the minimum, charges will be levied.

No, it is not advisable to use a current account for personal use. A savings account is better suited for personal use.

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