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  • What is the difference between savings and current account?

    Are you looking out for information regarding various types of banking accounts? Confused between current accouint, savings account and zero balance account? On this page our experts have responded to your questions about bank accounts.

    Can you explain the difference between savings and current account?
    Why is it said to open current account?
    What is the minimum balance we should maintain in savings and current account?
    Is there something called zero balance account?
  • Answers

    10 Answers found.
  • Current account
    Current accounts are opened for normal businessmen, companies, and businesses in the bank. These accounts are of many types according to the convenience and level of businessmen. For example, premium current account, regular current account, Flexi current account, etc. Due to business, account holders deposit money in the bank several times a day and withdraw. You understand that in a business, whatever are the requirements related to money, those facilities are available. But there are some disadvantages as well as some advantages of having this current account. First, let's know about the advantages.

    Advantages of the current account

    - Overdraft facility is available in the current account. Overdraft means that you can withdraw more than the amount that is not in the account. Suppose a businessman told the bank that he needs one lakh rupees, but only 40,000 rupees in his account. But 90,000 rupees are also coming from him. So the bank will ask you to withdraw one lakh rupees from the check.
    -There is no limit for transactions (deposit and withdrawal) in the account. Apart from this, there is also the facility of local check collection, free cash deposit, and the issue of demand draft on a large amount in the current account.

    Saving account-
    Savings accounts are open for small savings, such as fixed income. Student, House Maker, Pensioner and Senior Citizen, etc. This account is of two ways. Single and joint accounts. That is one account of one person or two people. You can open a savings account only in your own name or in the name of any other person with you.

    You can open this account by paying Rs 1000 to Rs 5000. There are three ways to withdraw money from the account. By filling in the money withdrawal form, through ATM and check. Any transaction above Rs 10 lakh in this account is given to the Income Tax Department.

    International debit cards, funds transfer from NEFT, safe deposit locker, sweep in the facility, mobile banking, bill payment, etc. are provided in a regular saving account.

    In Savings Plus account, in addition to international debit cards in high-level savings accounts, special discounts are available for purchasing Personalized Check, Payable at Par checkbook, Intercity, and multi-city banking, Discounts on locker rentals, Gold bars, etc.

    Advantages -
    - You will get interested in the money deposited in the account. The annual interest rate on savings accounts varies across banks. Currently, SBI's interest rate is 3.4%. The average saving account interest rate of all banks is 4 percent.
    - Facilities are available on this account also. Such as electricity bill, telephone bill, e-banking facility, etc. It all happens online. Through the internet.
    With this account, you can fill house loan, personal loan, car loan with EMI (installment every month).
    - Fund transfer (EFT) can also be done electronically from this account to another person's account.
    - The facility of deposit locker, sweep-in facility, mobile banking, bill payment, etc. is provided.

    In addition to the International Debit Card, special discounts are available for purchasing Personalized Checks, Payable at Par checkbooks, Intercity and Multi-city banking, Discounts on locker rentals, Gold bars, etc. in Savings Plus account and higher fixed-income accounts.
    All the money you have in your account. Can not remove the whole. About 1000 rupees have to be left in it. You can withdraw the whole only when the account has to be closed. There will be a limit for the withdrawal of money in the month. It can range from two to five. For example, if your account has an average balance of Rs 25,000, you can withdraw money three times. One who has an average of 50,000 rupees in his account, can withdraw 5 times. Apart from this, the money will be deducted on withdrawing money.
    PAN (Permanent Account Number) will have to be given on depositing Rs 50,000 or more. If the bank manager feels that you are accumulating more than you are not earning, then he can ask you where that much money came from.
    No matter how much money is in the savings account. You will not get a loan based on them. As if you want to have Rs 50,000 in the account, but withdraw one lakh rupees. Then it will not be possible.

    Zero balance account - Top banks in India, including State Bank of India (SBI), ICICI, HDFC Bank, and Axis Bank, offer zero balance saving accounts to their customers. A zero balance saving account does not require the customer to maintain a minimum balance in the account. SBI Basic Savings Bank Deposit (BSBD) Account, popularly known as Zero Balance Saving Account, is mainly for the economically weaker people of the society so that they charge for not being able to retain money in the account. Or save instead of paying fees.

  • # The main difference is of purpose . Saving account is for the savings whereas the current account is for the business and is used for the frequent transactions as is desired in the business.

    # Saving account is opened by an individual whereas the current account is openend by the firm.

    # In saving account the minimum balance one has to keep is lower than one has to keep in the current account.

    # In saving account bank gives the interest on the amount kept in the bank whereas no such interest is paid on the current account as the amount kept in the current account is meant for the business.


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  • The Current Bank Account is for the daily transaction which mostly small businesses and companies open. The current account is opened with a minimum sum of INR 3000 or it may vary depending on the type of account because there is a Basic Current Account category for small businesses and organisations. The daily transaction is a big advantage of this Current Account.

    Another category of bank account is Saving Account. Any individual can open this type of account. It can be a joint account or a single saving account. A minimum INR500 -1000 is needed to open this account and avail hasslefree transactions. In this type of account, daily transactions are not allowed. Withdrawals can be made through cheques, RTG's, NEFT or UPI.

    A zero balance Savings Account is also available for the weaker section of people, and it can be availed free of cost and without maintaining any minimum balance. Some banks provide overdraft facility even on Saving Bank Accounts.

  • The following are some important differences between a savings account and a current account.
    1. A savings account is a deposit account which allows limited transactions. A Current Account is more for making daily transactions.
    2. A savings account is good for salaried employees. It is good for the persons having a monthly income. A Current Account is the best for traders and entrepreneurs. Generally, these people will access their accounts frequently and a number of times in a day also.
    3. Interest at a rate of around 4% will be given to the money you have in your Savings account. But no interest will be there for the amount in your Current Account. You can consider a Current Account as a no interest-bearing deposit account.
    4. You will have an overdraft facility for your current account. But there is no such facility for a savings account. If you have this overdraft facility you can draw more money than what you have in your current account. The limits will be decided by the bank and the rate of interest for this overdraft will be as per the guidelines of the bank in which you have your current account.
    5.There will be a minimum balance required to be maintained in both savings account and current account. aThe minimum balance will be less in a savings account but it will be more usually for a Current Account.

    Zero Balance Account: yes. There is a savings bank account called Zero balance account. Generally, all banks will ask the customer to maintain a minimum balance in their SB account. Otherwise, they will charge some money for not maintaining this minimum balance. The minimum balance may vary from bank to bank and it may be from Rs.1000/- in some banks to Rs.10,000/-. But it will become difficult for some people to maintain that balance as their income is less and they may have to use their complete earnings and as such, they can't maintain this minimum balance. For such people, banks are offering zero balance accounts.
    Zero-balance account allows a limited number of transactions per month only. If the account holder is exceeding the limit the bank will convert the zero-balance account into a regular savings account.

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  • Savings account is an individual accounts where a person deposits his salary or earnings and then withdraws the amount as needed for expenses. If balance is more he can move some money to fixed deposits or other investments where interest or return is more. As the interest received on the Savings account is less people do not keep much amount there and keep only which can be required for monthly expenses plus some unexpected spendings. Savings account is very handy to the salaried people and the salary or earning directly deposited there. With every Savings account a debit card is also received for taking money from the ATM whenever required. So, Savings account is a convenient account for the people. There is some minimum amount to be kept in the Savings bank account otherwise the bank would take some levy on it. The minimum amount varies from bank to bank. A zero balance account is that account where facilities are less but one need not to keep a minimum balance every month or over a quarter.

    On the other hand the current account is meant for those people who use a large number of transactions like receipts from the customer and payment to the vendors. Generally business people have current accounts. In this type of accounts the bank gives many facilities including the overdraft facility which is a type of loan for short durations when the business owner has no money in account but payment is to made to a party. The businessman will repay it may be next day itself but it is a big facility as money is available to him as facilitated by bank.

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  • Can you explain the difference between savings and current account?

    A bank is an institution which facilitates 'financial intermediation'. That is a bank receives money from people (depositors) and use the money for giving loan to other needy people (borrowers). For this service bank charges and interest from borrowers and gives interest at a lower rate to the depositors.

    Though people bring money and deposit it at the bank, bank cannot pay interest to all such money. As bank gets profit by charging interest on loans given, bank can give interest to only such deposits which can be given as loans for a certain period and which the depositor does not take back immediately.

    Hence banks have categorised their deposit accounts under various heads.

    The first one is Fixed or Term deposits.
    As the name itself means, it is a deposit account where the depositor keeps money for a fixed term. As this money is available for the bank for long term lending bank pays maximum interest on such Term Deposit accounts.

    However not all people nor al money can be kept as fixed deposit as people need money for their use periodically. For such use banks have two major and popular categories of accounts. viz. Savings Accounts and Current Accounts.

    1. Savings Accounts
    Here the account holder puts in his money like salary, pension, dividend, rent etc, as and when it is received by him. Then he withdraws money for his general expenses a few times in a month as needed. Thus some amount always remains in this account, which may slowly and gradually grow also. The money is not withdrawn fully and some amount remains as balance always in the account. Generally banks stipulate how much minimum should remain so. This is called the minimum balance.

    To encourage such balance keeping, banks give interest to such daily balance with the bank. This interest rate is very much less than the Fixed Deposit interest rates. As the main aim of such accounts is savings, banks prescribe a limit in number of transactions, especially withdrawals in Savings Account.

    2. Current Accounts
    Business men deal in money transactions by receiving money from many people and paying many people in a day. So they may need to put the received money in bank and need to take money from bank to pay their clients. This makes them to deposit money, cheques and also withdraw cash and issue cheques many times in a day. So a separate category of accounts different from savings accounts are needed .Such accounts are called Current Accounts. Unlike a savings account a Current account will have may transactions in the same day. Hence there is need for more number of cheque leaves. As business needs are unpredictable there may be short of funds on certain times. So a current account is given facilities like large number of cheques, facility to 'overdraw", etc. Ban recovers charges for these and does not give interest to the account.

    So a Savings Account is suitable for people who have only limited income sources and do not need much transactions, but try to save some amount net of the income and expense.
    Current Account on the other hand is for business transaction where there will be more transactions.

    The minimum balance stipulation varies with banks. However on an average it varies from 500 rupees in savings accounts to 10,000 rupees in current account as per category and bank.
    Now many banks have Average Minimum Balance, which is more convenient for the account holders. As the savings account will have more incomes in the first few days of the month like salary, pension etc..and less balance on later days due to withdrawals, AMB helps in averaging without a strain to keep same minimum balance every day.

    Zero balance account.
    Generally any bank account has to be opened with remitting an initial amount, which may be the minimum prescribed balance amount too. However to help and facilitate people, especially the economically weaker sections of people, to open bank accounts a specified category of account namely Zero Balance accounts are available. As it is clear, such accounts can be opened without any initial remittance but by complying the KYC procedure and other formalities of account opening.

    The Jan-Dhan Scheme accounts are allowed to be Zero Balance account. However such accounts do not have all the facilities, or have only limited facilities as compared with regular savings accounts

  • A savings account and a current account differ in several ways. Some of the main differences are as follows:

    • A savings account is related to common people who want to save some money for their future. Government also encourages common people to have a saving account in bank and for this purpose government has started a scheme of zero balance and by this facility account holder can open an account without depositing any money which is , as per rule, is deposited in bank at the time of opening a bank account.
    Current account is related to business entities, industries and other financial establishments where transactions of money is occurred frequently.

    • Savings account is good for those people who have regular income like pensioners, employees, small shopkeepers etc. It can be opened as individual (Single account) or for several individuals (Joint account). Some private banks give a facilty to their customers that one of their employee goes door to door to collect a fixed amount daily. Post office also provides this facility.
    Current account is suitable for big firms and business entities which deal in their customers or suppliers. They give or receive the payment while doing business dealings with them. They have several transactions during the day. They use the services of banks as the mediator for payment related matter.

    • A savings account holder has limited number of transactions in terms of withdrawing money from banks in a month, if he does transactions more frequently then he has to pay some bank charges.
    Whereas in current account customers don't have any restrictions in transactions. It mainly facilitates frequent transactions when account holders needs to deposit or withdraw money.

    • In savings account bank gives interest to account holder who keeps his money deposited in bank for a longer period and tries to deposit more money as his savings
    whereas no interest is given
    to current account. This is due to the fluid nature of the account which facilitates frequent transactions with banks

    • Concerning keeping minimum balance in savings account differs from current account. For savings account less amount should remain in account to get it prevented from deactivation whereas limit of minimum balance is higher for current account.

    • Another facility that distinguishes Current Accounts from Savings Accounts is the overdraft facility. A current account holder can withdraw more than what is available in his current account subject to credibility of the customer. When the money is deposited back in the account by the customer, the overdraft is adjusted. The bank charges for this facility, considering it a short-term borrowing.
    This facility is not given to a savings account holder.

  • There are a few basic differences between a Savings account and a Current account.

    The savings account is for individuals who want to save his/her hard-earned money.
    A current account is used for business purposes and individuals, as well as companies, open a current account in banks.

    Savings bank earns interest for the account holder.
    Current accounts do not earn any interest to the account holder.

    Savings account have a limited amount of services.
    The current account provides services provided to a savings account as well as more services as an add-on.

    Minimum balance:
    Savings account require a minimum balance requirement, it varies from bank to bank. Government banks mandate keeping Rs. 1000 to Rs. 2500 as a minimum balance.
    The current account may or may not require a minimum balance mandate. Mostly, it does not have a minimum requirement.

    Overdraft facility:
    Savings account do not have an overdraft, LC, or other services which are usually available to current account holders.

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  • Many depositors starting their services or businesses would be interested to open their bank accounts. Hence they would be interested to know which of the two accounts- Saving Bank Account or Current Account would suit their needs. The selection of type of your account would entirely depend upon your banking requirement.
    Saving Accounts- Saving Bank Account is ideal for saving money for a long term basis and the depositors would be interested to put some deposit on regular basis. The following are the prominent features of the Saving Bank Account-
    1) It would fetch your regular interest on your deposited money at the prevailing rate of interest prescribed by the bank.
    2) The minimum balance to be kept is to the extent of Rs 1000/- or even more as per rules of the bank where account is to be opened.
    3) Internet earned would be benificial for your future.
    Current Account -
    Current Account would be ideal account for those who need frequent transaction and even in a day, there will be multiple translations. Some of the features associated with this account would include are indicated below-
    1) This type of accoaunt is for making quick transaction.
    2) It would provide you a lot of facilities such as overdrafts, no limit on withdrawals or deposits and more.
    3) There is no limit restriction on number of transactions.
    4) Features are suitable for the business persons needing multiple transactions in a day.

  • Generally, people choose to account according to their need.
    Saving bank account is opened for saving money for the long term. It can be opened by any individual. There is a need of INR 500 - 1000 for opening this account. It is good for those who are interested in saving hard-earned money. This account gives interest to the depositor on the basis of the current rate of interest. The transactions are very limited in this account regarding withdrawing money on monthly basis. If it is done frequently then you will have to pay some bank charges. Thus, an overdraft facility is not available in this account.
    Whereas, the current account is opened for the business purpose where there is no limitation of transaction. It is good for a firm or business entities. Interest is not given to the depositor in this account. A lot of overdraft facility is available. There is no limitation of withdrawing money or deposit money.

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