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Difference Between A Savings And A Current Account


Many people get confused while withdrawing money from ATM when they see the choose "Current Account or "Savings Account".


They both are different type of accounts offered for different purposes. Now, let us know the basic difference between savings account and current account.

Difference Between A Savings And A Current Account

Savings Account

As the name indicates, this account is meant for saving purposes. Any individual either single or jointly can open a savings account.

In these accounts one has to maintain minimum balance as low as Rs 1000/ in some PSU banks while it is Rs 10,000 and above in private sector banks. In savings account number of financial transactions are restricted.

Interest rates are higher when compared to current account. Any cash transactions of Rs 10 lakhs and above in a year will be informed to the IT department.

In case, if you do many cash transactions and issuing of cheques in a savings account, banks have all the right to question you on the income and reason for transaction.

Difference Between Salary Account and Savings Account (SB Account) In A BankDifference Between Salary Account and Savings Account (SB Account) In A Bank

Current Account:

Current account is mainly for business persons, firms, companies, public enterprises etc. This is useful when a person does a number of business transaction on daily basis.


While, there is no interest paid on amount held in the account, there is no limit on number of transaction.

In case of ATM withdrawal if you have a salary account or zero balance account you should opt for the savings account.

Savings AccountCurrent Account
PurposeTo encourage savingMany transaction
Ideal forSalaried personBusiness person
Minimum AmountLess amountHigher amount(depending on the bank)
Interest Rates4% - 6%Normally, no interest is paid
Over DraftNot AllowedAllowed

Primary difference between savings and current account

Thus, while a savings accounts caters to an individuals, a current account would cater to a business person. No interest is normally paid on a current account, while you get regular and periodic interest in the case of a savings bank account. Salaried individuals should not open a current account, unless they have a business.


Another difference between a savings and a current account is that there are various types of saving accounts. For example, there used to be a no frills savings account, while in the case of current account, there are no different types.

It's also important to remember that you are not permitted to open a savings account, if you are going to use it as business. Similarly for a current account. You cannot open it, when you have salary and other money going into it. In any case, you do not get interest for maintaining balances in your current account.

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