Current vs. Savings Account: Key Differences, Features, and Which One to Choose

Current vs. Savings Account: Key Differences, Features, and Which One to Choose

Savings Account

5 min read  |  6 months ago

Current vs. Savings Account: Key Differences Explained


There are many kinds of bank accounts that are available across banks, NBFCs, small finance banks, and other financial institutions today. Current and savings accounts are two of the most prominent types that banks offer. Which one is right for you? Let’s look at who these accounts cater to and their key differences to help you make an informed decision.

What are Savings & Current Accounts?

Savings accounts are the commonest offerings across banks and financial institutions. They are meant for depositing and saving money, while earning a fixed rate of interest as stipulated by the bank from time to time. You can also withdraw the money you need and make payments or carry out transactions from these accounts. They are meant for almost everyone, right from salaried and self-employed professionals to other individuals. 


Current accounts are more tailored for businesses and entrepreneurs who need to transfer and withdraw bigger amounts on a daily basis. These accounts help with fund management although they do not come with interest like savings accounts. The daily withdrawal and deposit limits are higher and there are several services for account holders like doorstep banking, payment and collection solutions, cash management services, business banking facilities, overdrafts, etc. 


Let us now examine the main differences between these account types. 

Main Differences Between Savings and Current Accounts

Let us take a closer look at the key differences between these two accounts below.

Which One Should You Choose?

Your choice should be based on your specific needs and current financial and transaction goals. If you want to save more money over a period of time, create an emergency corpus, or meet financial objectives in the future, a savings account may be the best option. It will give you some earnings through interest in this case, although there will be transaction limits, which does not make it best for daily spending.


On the flipside, if you’re a businessman or entrepreneur who needs an account for daily financial transactions (bill payments, paying suppliers/vendors, buying business essentials, getting income, etc.), a current account may be more suitable for you. It will offer the best liquidity and higher transaction limits along with overdraft facilities and other business-oriented services that may be helpful. However, you will have to forego the interest income like savings accounts while paying more fees and having to maintain a higher average balance. You can also opt to open both these types of accounts, each catering to two distinct financial objectives.

Conclusion

So, you now have a clear idea regarding the main differences between savings and current accounts. They are two different products that cater to varying requirements and that is what essentially becomes the core theme. You have to choose depending on the nature of your financial transactions and objectives, along with your overall customer type. It’s not a question of choosing one over the other actually. 


A savings account is a necessity for every individual, while a current account helps meet various other requirements that entrepreneurs, businesses, and traders may have. Hence, if you fit the bill on both counts, consider opening both these accounts or stick to a savings account if you earn a steady income and want to save for your future goals. Unity Small Finance Bank is a great place to find attractive savings and current bank account options with multiple features and benefits. 

About Unity Small Finance Bank

Unity Small Finance Bank is committed to making banking simpler and more accessible for everyone. Our services include Savings Account, NRI account, Current Account, Fixed Deposits, and Personal Loans offering flexible tenures and attractive interest rates. We also offer financing options like MSME Loans and Microfinance to support businesses and underserved communities. Learn more about Unity Small Finance Bank here.

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Key Parameter Savings Accounts Current Accounts
Usage They help you save and grow your money with interest They help you take care of daily business transactions with access to quick loans and overdraft facilities to avoid running out of cash
Suitability They are more suitable for regular individuals with short or long-term savings goals Current accounts are ideal for entrepreneurs, businessmen, and companies who make money transfers regularly
Transaction Limits Savings accounts have restrictions on the maximum number of transactions in a month Current accounts have higher or unlimited transaction limits, although charges may apply upon crossing the maximum threshold
Interest Savings accounts earn interest as fixed by the bank There is no such interest earning with a current account
Overdraft facilities These are not available with savings accounts Current accounts mostly come with overdraft facilities
Minimum balance The minimum average balance requirement is lower Current accounts have higher minimum average balance requirements