Difference between Current Account and Saving Accounts

The basic objective of a Savings Bank Account is to enable the customer save his / her liquid assets and also earn money on that saving. The Savings banks Accounts are preferred by individuals and provide liquidity for private and small businesses sometimes. On the other hand the current account is basically a transactional account which is preferred by business people. The basic objective of the current accounts is to provide flexible payment methods to the business people and entities. These payment methods include special arrangements such a overdraft facility, accommodation of standing orders, direct debits, offset mortgage facility.


Usually saving accounts have low transactions while current accounts have large transactions.


Savings accounts involve personal handling of assets, while current accounts are aimed to make the account holder free of personal handling of liquid funds. The current account facility helps the business to run without hurdles due to non availability of funds and short term deficits.

Interest Income

Usually the current accounts don’t earn interests. The saving accounts earn around 3.5% interest at present in India. This interest rate is now deregulated in India, so banks themselves define what rate of interest they would pay to their customers. (Please note that in case of death of the current account holder his legal heirs are paid interest at the rates applicable to Savings bank deposit from the date of death till the date of settlement)


As discussed above saving accounts have no overdraft facility, current accounts have. The money can be borrowed for short term and to be paid back with interest.

Minimum Balance

Usually saving accounts need a minimum balance in the banks to keep the account active (however No Frill accounts require either nil or low minimum balance to be maintained). In current accounts there are no minimum balance requirements.

Topics: , ,


  • abdirizak mohamed dubbed

    thanks really it is good helping thanks more and more