The main difference between a savings account and a current account lies in their purpose, usage, and features. Both are types of deposit accounts offered by banks, but they serve different financial needs. 1. Purpose Savings Account: Meant for individuals to save money and earn interest on their deposits. It encourages personal savings and is ideal for salaried people, students, pensioners, etc. Current Account: Meant for businesses, firms, companies, and professionals who have frequent banking transactions. It is used more for day-to-day operations than for saving. 2. Interest on Deposit Savings Account: Earns interest (usually between 2.5% to 4% per annum, varies by bank). Current Account: No interest is paid, as it's not meant for saving but for transaction convenience. 3. Transaction Limits Savings Account: There may be a limit on the number of free transactions (especially in non-home branches or ATMs). Current Account: Allows unlimited transactions (deposits and withdrawals), suitable for high-volume business operations. 4. Minimum Balance Requirement Savings Account: Lower minimum balance requirement (some accounts offer zero balance). Current Account: Higher minimum balance (varies by bank), and penalties may apply if not maintained. 5. Overdraft Facility Savings Account: Generally no overdraft allowed (except in some cases like salary accounts). Current Account: Overdraft facility is commonly available, allowing businesses to withdraw more than their balance up to a limit. 6. Target Users Savings Account: Individuals, students, retirees, salaried people. Current Account: Businesses, traders, firms, companies, self-employed professionals. 7. Bank Charges Savings Account: Usually fewer charges and fees. Current Account: Banks may impose more service charges due to higher transaction volume and additional facilities. In Simple Terms: A savings account is for saving money with some interest. A current account is for doing business, with flexibility in transactions but no interest.

Dear Client, Between what a savings account and a current account do is important in terms of good financial management. Although both are types of bank accounts they have very different uses. Here are the main differences: Goal. Savings Account: Mainly for people to save money and earn interest. Also for keeping funds which you don’t use in your day to day transactions and for which you have both short term and long term goals. Current Account: Primally what we have is a tool for businesses, professionals and entrepreneurs which sees high volume of daily transactions. Also it is put in place to facilitate in large scale deposits and withdrawals which isn’t to say that it does well in terms of interest. Rate of Interest. Savings Account: Banks provide low interest on what is put into a savings account. This is the primary benefit of saving. Current Account: These accounts which do not pay out interest. The bank doesn’t charge interest on the balance as the account is for high frequency transactions and liquidity, not savings. Transaction Parameters. Savings Account: Usually has that which free transactions (withdrawals and deposits) you can do in a month. If you go over these it will cost you. Current Account: Provides large, flexible transaction limits which in turn is for businesses that do frequent payment transactions without issue. Minimum Balance Policy. Savings Account: The min balance for such accounts is usually lower than that of current accounts. Also many banks provide zero balance savings accounts. Current Account: Usually a high minimum balance is required. Penalties may be large if that is not met. Over draft Policy. Savings Account: Doesn’t provide over draft option which means you can’t withdraw more than what you have in the account. Current Account: A present feature of a current account is the overdraft option which allows the account holder to go beyond what is available in their account balance up to a set limit. This is a very important feature for businesses to handle short term cash flow issues. In that we see that as an individual looking to save and earn some interest, a savings account is the best option. Should you be a business owner or professional with a high volume of daily transactions a current account is what you’ll want for its liquidity and transaction flexibility. I hope this answer helps to resolve your queries. Don’t hesitate to reach out with any further questions. Thank you!