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Make Money Goals

Where your money lives and grows
  • Home
  • Investing
    • Stock Market
      • 8 valuable lessons that can be learned from the past stock market corrections.
      • Trading Vs Investing, the key differences. What is your aim?
      • What is a systematic investment plan(SIP) and how does it work?
      • Beware, investors. Be cautious of the Pump and Dump stocks.
      • What are the FAANG stocks? How do they compare to the HRITIK, SALMAN, and the BHARATH stocks?
      • What is Portfolio Management Services(PMS) and the advantages?
      • Tulip Mania: A recorded bubble in history. Lessons for stock and Crypto investors.
      • What is scalp trading and the pros and cons?
      • Things to consider before investing in an Initial Public Offering(IPO).
      • Will the leak of personal data shake the investors’ faith in the depository for BSE and NSE?
      • 8 books on Stock market investing that can make you good investors.
      • What is ESG investing and why it is becoming important the world over?
    • Mutual Fund
      • What is rupee cost averaging and the advantages?
      • Invested in too many mutual funds. How many mutual funds should you have in your portfolio?
      • What are index funds, benefits, and the best funds?
      • Best Mutual Funds for 2022.
      • What are the debt mutual funds and their categorization?
      • What is Infrastructure Investment Trusts(InvITs) and how to invest in them?
      • What are the types of Equity Mutual Funds, their benefits, and risks?
      • 12 things to know before investing in a mutual fund.
    • Real Estate
      • Thinking of buying a resale flat. These are the documents you need to check.
      • What are senior living, its advantages, and the things to check?
      • What is Coliving and the pros and cons?
      • 5 best ways to invest in real estate.
      • What is an Affordable housing scheme?
      • What is a Green Building and its advantages?
      • Second homes and some of the preferred locations.
      • What are Real Estate Investment Trusts(REITs) and how can we invest in them?
    • Cryptocurrency
      • Cryptocurrency Vs stocks. The differences and what suits you better?
      • How to invest and ride out a Crypto bear market?
      • What is insurance on Cryptocurrency and the future?
      • Taxation of Cryptocurrency in India in Budget 2022.
      • The explosion of crypto gaming and the coins to consider for investment.
      • What are stablecoins and their uses?
      • Gold Vs. Bitcoin. A comparison and how they stack up.
      • All the things you need to know about cryptocurrency-Mining, Wallet, Crypto Exchange, Apps, Taxation, Selection, and Future.
      • What are NFTs, their benefits, and how to deal with them?
    • Commodity
      • What are the Sovereign Gold Bond Scheme(SGB) and the things to be aware of?
      • Diversify your portfolio by investing in Silver Exchange Traded Funds(ETFs).
      • 5 ways to invest in Gold.
      • Trading in spot gold is now possible just like the stocks.
  • Money Dealing
    • Banking
      • Lakshmi- The Goddess of Wealth & Prosperity.
      • How does the Rule of 72 work and its understanding?
      • What is Streedhan and how can a woman protect it?
      • What are Ponzi schemes and how to avoid them?
      • How to build an emergency fund and the benefits?
      • How to choose the right bank for your financial needs?
      • What is the difference between savings and a current account?
      • What are Neobanks and how they are helping us?
    • Credit Card
      • The best travel credit cards and their benefits and features.
      • Disadvantages of using credit cards.
      • Advantages of having a credit card.
      • What is a credit card and how to apply for one?
    • Loans
      • Benefits of paying off student loans early and how to do it.
      • What are personal loans and how to select the best possible loan?
      • A surge in Buy Now Pay Later payment schemes and the pros and cons.
      • What are the loan options for the unemployed?
      • What is an emergency loan and where to avail it?
      • What is peer-to-peer lending, how it works, and the pros and cons?
  • Personal Finance
    • Post Office
      • The features and benefits of the National Saving Certificate(NSC).
      • Highlights of the Post Office Monthly Income Scheme.
      • Post Office Savings Account interest rate and important features.
    • EPF & PPF
      • What are Public Provident Fund(PPF) account, its features, and its benefits?
      • What are Employee Provident Fund(EPF) and the key features?
    • Retirement Planning
      • India achieved Independence 75 Years ago. How can you achieve financial Independence?
      • 9 Personal finance mistakes young professionals make.
      • How to find the right financial advisor to meet your life goals?
      • How to ensure fair distribution of wealth among children?
      • How important is financial transparency in a marriage?
      • Financial Planning Tips for Millenials for 2022.
      • What are Wealth Management and its advantages?
      • Financial planning before leaving the job.
      • How to carry out retirement planning and its benefits?
    • Insurance
      • How to revive a lapsed insurance policy?
      • How to make the insurance claim process easier for your nominees?
      • What are the types of car insurance?
      • What are the insurance plans that a person must include in their portfolio?
      • How to file a complaint against an insurance company?
      • What is health insurance and the things to consider before selecting a health insurance plan?
      • What does the home insurance cover and the types?
      • What are the benefits of life insurance?
      • What are the types of Life Insurance plans and their benefits?
    • Frugal Living & Saving
      • Affected by high prices. How to fight inflation and beat it?
      • How to raise a financially responsible child?
      • How to save money when your income is low?
      • What is minimalism and its benefits in managing personal finances?
      • 20 Frugal Living tips to save a pile of money.
  • More
    • Tax Planning
      • What happens if you miss the income tax filing deadline?
      • The rise of electric vehicles and the benefits.
      • What are Equity Linked Savings Scheme(ELSS) and the best funds to invest in?
      • Year-end last-minute tax-saving tips that can be used.
      • 11 tax saving options for the salaried employees.
      • How are the gifts that you receive taxed?
    • Disclaimer
    • Earn Money
      • 13 side-hustle ideas to make some serious money.
      • 9 best Freelancing Websites to find work.
  • About
    • Privacy Policy
    • About Make Money Goals
    • Contact Us
Home » What is the difference between savings and a current account?

What is the difference between savings and a current account?

  • by dbssethi
  • 04/10/202108/12/2021

Photo courtesy Expect Best on Pexels.

A person wants to open a bank account, once he starts earning from a job or after starting a business. Having a bank account is essential in the modern age and many times they wonder which one is the right option; to open a savings account or a current account. The choice of account depends on their banking needs.

A saving bank account is a basic type of bank account that allows you to deposit money, keeping it safe, and withdraw it whenever necessary. These accounts are offered by most banks and financial institutions and pay interest on deposits. The interest on saving bank deposits is different for each bank. If you keep cash at home you may be tempted to spend it but keeping it in a savings bank account will help you in reaching nearer to your long-term goals.

A current account is used by businessmen who have a large number of transactions to make, which are deposits and withdrawals. In India, the current account can be opened by depositing between Rs. 5000 to Rs. 25,000. In the current account, the amount can be deposited and withdrawn anytime and is most suitable for making payments to creditors using cheques.

Differences between Saving bank and Current account-

Purpose-

A savings bank is designed to promote savings. This is meant for individuals who deposit their salaries in the account and can be used for paying household and personal bills.

A current account is intended for people who do business like shopkeepers, traders, and companies where the volume of transactions is very high.

Interest-

The current account is opened for business purposes so the money deposited in this account doesn’t earn any interest. It is mainly for the easy facilitation of payments i.e. to accept and send payments.

A savings account offers interest on the money deposited. The interest may not be very high and may range between 3.5% to 6% per annum and is not sufficient to cover inflation. The interest may be credited to your account quarterly or half-yearly.

Transactions-

The savings bank account facility provided by a bank does put a limit on the number of transactions an account holder can carry out in a month and the limit may be between 3 to 5 transactions every month.

The current account does not have any limits for the maximum number of transactions and serves the purpose of carrying out frequent transactions. This is required for business purposes where there is a need for multiple transactions.

Balance-

Except in the case of zero balance accounts you need to keep a minimum balance in the account. The minimum balance is the amount of money that must be always there in your account to prevent it from deactivating.

In the savings accounts, the minimum balance required is low but in the current account, a higher amount of minimum balance is required to be kept.

Overdraft facility-

When you withdraw more money from the account than is actually there, it is called overdrawn.  In business, there are lots of transactions every day and sometimes there is a mismatch between deposits and payments and there may be a shortage of funds to make payments. To tide over this situation and prevent the cheques from being dishonored the bank provides an overdraft facility. Current accounts offer overdraft facilities while saving accounts do not.

The current account has many variants and some of them are-

  • Premium current account.
  • Standard current account.
  • Packaged current account.
  • Foreign currency account.
  • Simple cash account.

The list of saving bank accounts offered by different banks are-

  • Regular savings account.
  • Zero balance or basic savings account.
  • Women’s savings account.
  • Kids’ savings account.
  • Senior citizens savings account.
  • Family savings account.
  • Salary based savings account.

The current account and saving account are meant for customers having different requirements. A businessman opens a current account due to the liquidity and the number of transactions he requires to carry out while an individual opens a savings account when he doesn’t want to carry a large number of transactions and favors receiving interest. It is up to an individual to compare the facilities and decide which account he wants according to his banking requirements.

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