5 Key Differences Between Current Account And Savings Account

Current account and Savings Account are two of the most common types of accounts offered in Retail and Private Banking. But, which option is the right fit for you? Let us understand the key features of each of the account types, and examine the difference between a Current Account and savings account, to assist you in deciding the right one for your financial aspirations and requirements.

What is Current Account

Sometimes also referred to as a Checking Account, it is primarily intended for individuals with frequent financial transactions, like traders, entrepreneurs, businessmen, companies, firms, trusts and such.

Historically, paper checks were the most common form of making payments, hence the term ‘Checking Account’. They usually offer a limitless number of daily transactions, but do not provide any earnings through interest, due to the deposit and withdrawal fluidity they offer.

In turn, this also means that they usually require a high minimum balance to be maintained, to avail the benefits of the account. Most MSME owners, businessmen and other entrepreneurs would concur that ICICI Bank is the best bank for a Current Account, offering a wide range of services, including the ease of opening an account online, in a matter of a few clicks, from the comfort of your home.

Gone are the days of standing in queues, filling up multiple forms and dealing with the delays in clearance of transactions, thereby causing loss in the form of cost of opportunities. The superior and seamless experience provided by ICICI Bank to its Current Account users makes it an ideal partner, in their financial journey.

What is Savings Account

As the name suggests, a Savings Account is for savings and accruing money. This is ideal for salaried people who wish to build their wealth for their short/mid. The minimum balance to be maintained is usually lower in these accounts.

A typical Savings Account also offers an interest rate because the cash in your account is leveraged by banks to finance their investments and engage in lending activities. They subsequently share a portion of the gains achieved with you, in the form of interest on capital, thereby increasing your accumulated wealth over time.

ICICI Bank offers a vast types of Savings Account related solutions, with a gamut of benefits and add-on features. Account can be done instantly, using your Aadhar Card.

Difference between Current Account and Savings Account

The table provided, below, intends to serve as a quick and handy synopsis of some of the common differences between a Current and Savings Account. While certain other nuances or differences can exist depending on specific banks and their offerings, the below-provided table highlights the most common distinguishing features and principles.

Benefits of Current Account and Savings Account

Here are the respective advantages of having a Current Account and a Savings Account:

Savings Account

• A Savings Account offers a safe space to keep your money while you access it easily through ATMs and internet or mobile banking

• It lets you earn interest over time, thus helping you grow your savings

• It can also be a safety net for unforeseen financial emergencies

• It helps inculcate the saving habit and build financial discipline.

Current Account

• The ideal option for businesses is a Current Account, as it facilitates everyday financial transactions like making and receiving payments

• Unlike a Savings Account, a Current Account allows unlimited transactions and offers an overdraft facility to help with cash flow management

• It helps you grow your business with services like card payments and cheque facilities.

How to Choose Between a Current Account and a Savings Account

The pattern and nature of your financial transactions should be considered when deciding between a Current Account and a Savings Account.

• A Current Account, also known as a Checking Account, is the best option for people or businesses who make several transactions in a day. It provides flexibility for everyday financial operations but does not offer any earnings through interest.

• A Savings Account, on the other hand, is more appropriate for individuals. While it usually restricts the number of transactions that can be made free of cost, it also allows you to earn interest.

So, decide your account type based on your specific requirements. Analyse the features, costs and advantages of each type of account and accordingly choose the one that suits your financial goals.

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