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Difference B/w Current Account and Savings Account

Current Account vs Savings Account

Last Updated 13th Apr 2021

  • Savings accounts are suitable to build emergency funds, whereas current accounts facilitate regular business transactions.
  • Unlike a saving account, current accounts do not have any limit on monthly transactions.
  • You need to maintain a relatively higher minimum balance in a current account than a savings account.
  • A saving account is suitable for individuals, whereas a current account caters to business organisations.
  • Savings Account offers interest rates ranging between 0.50% to 7.50% whereas a current account does not provide any interest.
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Savings Bank Accounts v/s Current Accounts

Savings Account and Current Account are amongst the two most common and widely opened accounts in a bank. Savings Bank Accounts as the name suggests is for personal savings for a long term and allows account holders to save and earn interest on the savings. On the other hand, a current account is also known as a business account and is opened to ease off regular business transactions. Both the accounts can be opened at leading public and private sector banks such as State Bank of India, ICICI, HDFC Bank, Citibank etc. depending on your banking needs.

Savings Account

A savings account opened at a bank is a basic type of account that allows you to deposit money and keep it safe while earning moderate interest on the balance maintained in the accounts. Key features of Savings Account are mentioned below.

  • A Savings Account provides fixed returns on your deposit. The rate of interest on a Savings Account varies from bank to bank, and it ranges between 0.50% to 7.50%.
  • With a Savings Account, you need to maintain a low minimum balance in your account to keep your account activated. Some banks also offer Zero Balance Savings Accounts.
  • Account-holders can withdraw funds from a Savings Account using ATM/debit card.
  • Savings Accounts are mostly suitable to save funds for emergencies. However, it does not provide an overdraft facility to the account holders.

Current Account

Current Account is a type of account that is opened by the people in business who have high regular transactions with the bank. Account holders can open the current account to ease off daily business transactions and get the following benefits with their current account.

  • These accounts offer limitless cash withdrawal facilities and thus do not provide any interest.
  • As a current account has no limits on deposits and withdrawal, therefore it involves high fees for facilitating corporate transactions.
  • Account holders can also get overdraft facility with the Current Accounts.
  • You can make payment via cheque, demand drafts, pay orders etc. for making payments against Current Accounts.

What is the Difference Between Current Account Vs Savings Account?

Point of difference Current Account Savings Accounts
Purpose It facilitates frequent business/financial transactions. A saving account encourages and promotes savings by providing interest on money deposited on savings.
Ideal for Current Account is suitable for businessmen, firms, companies, organizations, public enterprises, etc. who want to make regular business transactions. Savings Account is meant for individuals and self-employed who want to save some money for small/big purchases, travel etc.
Minimum Balance You need to maintain a relatively higher balance in a current account. The limit for the requirement of a minimum balance in a current account varies from bank to bank. The requirement for minimum balance in a Savings Account is low. With some Banks, you may be required to maintain any balance in your account.
Monthly Transaction There are no limits on the number of monthly transactions in a current account. The number of monthly transactions in a savings account ranges from 3 to 5 transactions per month (financial and non-financial).
Interest They offer zero or nil Interest. The rate of interest on Savings Account ranges between 0.50% to 7.50%.


What is the difference between the savings account and current account in India?

A savings account is opened by individuals to save funds for personal needs or emergencies. Account holders can also earn interest on the savings account. On the other hand, a current account is mostly opened by people in business to conduct regular business transactions and does not offer any interest.

How can I convert my savings account to my current account?

It is not possible to convert your savings account to a current account as both the accounts are different in nature and also have distinct features and benefits. While a saving account is meant for personal use and thus can be opened with basic documents for KYC. On the other hand, a current account requires you to submit documents for business existence as well.

What is the minimum balance in my current account & Savings Account?

The minimum balance required in current and savings accounts varies from bank to bank. While some banks provide zero balance savings accounts, the requirement for maintaining a minimum balance in a current account is relatively higher in a current account.

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