It is extremely essential to have a current account with a well-known and a reputed bank, if you are running any sort of commercial activity. It is a very important account because your daily transactions would take place from this current account. All your regular bills and payments would be settled through this account. It is possible for two people or partners to have a joint current account, if they are sharing the expenses.
Majorly, businesses and corporate houses have current accounts for their business transactions. Most of the times, the banks provide a debit card to the current account holder for withdrawals from ATM. The debit card can also be used to settle payments if you do not have cash.
Many banks offer several additional benefits such as travel insurance along with the current account. However these benefits come for a fee. The fees are automatically deducted from the account. Apart from the current account, banks also offer savings accounts. There are many differences and similarities between current account and savings accounts. Let us look at them.
- Interest rate – This is one of the major differences between the savings account and current account. Banks offer attractive interest rates on savings account and interest is given every six months. However, on the current account there is little or no interest provided. With the increasing competition in the current accounts market, the situation is however changing.
- Purpose of Account – The purpose of maintaining a savings account is to encourage savings of money and build a fortune. The purpose of having a current account is to spend money and to make daily expenses. This is a major difference between both the accounts.
- Withdrawals – You can withdraw money from both current account and savings account anytime and anywhere. However, there may be limitations in terms of withdrawals. You can make numerous transactions throughout the day from current accounts. There may be limitations on the savings account withdrawals in a day.
- Age limit – In order to open a current account, you must be minimum of 18 years of age. If you are opening the account for business purpose then all the documents related to your business would be required. However, in case of savings account even a minor can open an account.
Apart from the above mentioned similarities and differences, it is possible to overdraw from both the types of accounts in case of emergencies. However, you can overdraw from your account for a fee. It is best to use your bank account balance wisely and you must monitor your accounts regularly.