In a previous post, we broached the subject of account type taking a critical look at the savings account, how it works, and what benefits there are to it. In this follow-up post, we shall be considering the current account, and how it measures up against the savings account. Do dig in, let’s make today a profitable one!
What Is a Current Account?
A current account is mainly for business persons, firms, companies, public enterprises etc, and is useful when a person has to do a number of business transactions on a daily basis. While, there is no interest paid on amount held in the account, there is no limit on number of transactions. The current account is also known as checking account or a transactional account.
With a current account, the holder enjoys services like setting up automatic payments including direct debits and standing orders, issuing cheques, and using a debit card to withdraw cash and pay for goods and services, overdraft facility, no limit on the number of withdrawals/deposits, internet banking, etc.
Key Differences Between Savings Account and Current Account
- While the purpose of a savings account is to encourage savings, a current account is encouraged for individuals required to make many transactions on a daily basis.
- Savings account is ideal for salaried people because of regular monthly savings. Conversely, current account is perfect for business people because of the day to day money transactions.
- The minimum account balance for savings account is usually little, while a higher amount is required for a current account
- There is a restriction on the number of monthly transactions, in the case of a savings account. There is no such restriction for a current account.
- The primary difference between them is that current account doesn’t give any interest (except the bank is offering special deals), whereas savings account offers interest on a daily basis.
And that’s all to the mystery of the current account. With this, you will never be in doubt as to which suit the purposes of your present circumstance.
See Also: Thinking Of Opening a Savings Account? Get All the Details Here About How It Works