In today’s corporate world the life without the banking system is not the very progressive for the individuals, organizations, and firms. The bank offers dozens of facilities to the account holder so the people can do various tasks through their accounts while just resting at the luxuries of their houses. Whenever someone not having knowledge about the banking system goes on to open his bank account gets confused when he is asked by the bank’s correspondent that which of the account from the following he/she wants: Current Accounts, Savings Account, Recurring Deposit Account or the Fixed Deposit Account. As the people and organization mostly go for the current account or the saving account, her we’ll be different between the functions and nature of both these accounts. A saving account is the deposit account that bears the interest on the deposited amount. In this type of account, the person is asked to maintain the minimum amount in the month, and the number of cash withdrawals is also limited. Conversely, the current account is the active account through which one can make frequent deposits or make unlimited withdrawals without any notice or maintain the limit in the account. The bank pays no interest on the current account.
What is Savings Account?
Savings Account is the account on which the customer is given the interest on the deposited amount. This type of account can even be held with the bank or any other of the financial institution. The one eyeing to have the savings account looks for the bank which offers the more interest rate and offers more of the withdrawals during the specific period. It is the most common type of the deposit account that is provided by the commercial bank to encourage the customers to have saved in their account and enjoy the interest rates. As expected, the saving account has both the pros and cons. This type of accounts is mainly offered to the individuals who are salaried persons. In many of the countries, the people set the savings to account for the future purpose. Through this type of account, the amount remains safe with the bank, and as the interest is incurred over it, the amount grows up and becomes more than the actual amount deposited. At the same time, the customers having a savings account are provided the limited number of withdrawals during the specific time and also asks to main a certain monthly average balance to claim the interests. Like other deposit accounts, the one having a savings account is provided various facilities like online money transfer, mobile banking, internet banking, ATM cum Debit Card facility, calculation of interest on the daily basis and many others.
What is Current Account?
The current account is the type of account provided by the commercial bank or the other financing institutions to the business man and different organizations. To make frequent deposits and unlimited withdraws, this type of current account is offered. The one wanted to open the current account requires to have the high amount, and in exchange for it, the customer is offered with the wide array of facilities like the direct debits, standing instructions, transfer, and overdraft facility. The most promising benefit it has for the business man is that it is supported by the frequent money transactions and an unlimited number of withdrawals and deposit facility. No minimum amount is required to be kept on the average basis on this type of account as no interest is given to this type of account. This type of the account is best suited for the business purpose as one can make the unlimited transfer without any hassle.
Savings Account vs. Current Account
- Savings Account is the account on which the customer is given the interest on the deposited amount. On the other hand, the current account is the active account through which one can make frequent deposits or make unlimited withdrawals without any notice.
- The banks offer the interest on the savings account not on the current account.
- One has to maintain a minimum average of the amount in a savings account, but not in the case of the current account.
- In a savings account, the customer is provided with the limited withdrawals and deposits. In contrast to it, the current account user can enjoy the unlimited cash deposits and withdrawals.
- The savings account is most suited for the salaried individuals, while the current account is best suited for the businessman or the organizations.