Current Account Vs Savings Account: Checkout Differences
  • Personal
  • Business
  • Corporate
  • Private Banking
  • Privy League
  • NRI Services
  • Investors
  • Personal
  • Business
  • Corporate
  • Private Banking
  • Privy League
  • NRI Services
  • Investors
07 AUGUST, 2023

What is a Current Account?

In the context of banking and finance in India, a Current Account is a type of bank account that businesses, companies, and entrepreneurs primarily use to manage their day-to-day financial transactions. Unlike Savings Accounts, which are designed for personal savings, Current Accounts are ideal for frequent and large transactions.

What is a Savings Account?

A Savings Account is a bank account designed for individuals to save money and earn interest on their deposits. It is one of the fundamental banking services that allow account holders to park their earnings and earn interest.

To understand the difference between Current and Savings accounts, read on.

Difference Between Savings Account and Current Account

While these bank accounts serve distinct purposes for individuals and businesses, understanding the differences can help you choose the right one for your financial needs. Here’s a breakdown of how they differ from each other:

Parameter Current Account Savings Account
Interest Earnings No interest earnings The bank gives interest on the deposit amount
Number of Transactions No limit on the number of transactions A limited number of transactions allowed
Purpose Used for business transactions Used for building emergency funds, save money, and earn interest
Used for Business transactions and bill payments Saving money and depositing extra funds
Suitable for Business people Individual customers

Pros and Cons of Current Account & Savings Account

Both Current Account and Savings Account types have their advantages and drawbacks. Here is an overview:

Current Account Pros

  • Unlimited Transactions: Current Accounts usually offer unlimited transactions, allowing businesses to manage a large number of transactions.
  • Overdraft Facility: Many Current Accounts offer an overdraft facility, providing a buffer for businesses in case of temporary financial setbacks.
  • Business Use: Current Accounts are designed for business purposes, allowing entrepreneurs to make payments, handle payroll, and manage expenses efficiently.
  • Online Banking: Current Accounts often come with advanced online banking features, enabling businesses to manage their finances conveniently from anywhere.
  • Chequebook Facility: Current Accounts typically provide chequebooks, which are used for making payments for business transactions.

Cons of Current Account

  • Minimum Balance Requirement: Some Current Accounts require businesses to maintain a minimum balance.
  • Interest Rates: Current Accounts do not offer interest on deposits.

Savings Account Pros

  • Interest Earnings: Savings Accounts offer interest on the deposited amount, allowing account holders to earn a small income on their savings.
  • Safety: Savings Accounts are insured up to a specific limit, providing a safe place to store money.
  • Financial Discipline: Savings Accounts encourage financial discipline by allowing individuals to save money for future needs or emergencies.
  • Easy Access: While not as flexible as Current Accounts, savings accounts still offer relatively easy access to funds, allowing account holders to withdraw money when needed.

Cons of Savings Account

  • Limited Transactions: Savings accounts typically have limits on the number of transactions are allowed per month, exceeding which may lead to additional charges.
  • Lower Interest Rates: While savings accounts offer interest, the rates are usually lower than other investment options, limiting the potential for significant earnings.
  • Penalties for Non-Maintenance: Some Savings Accounts require a minimum balance, and falling below this balance might lead to penalties.
  • Not Ideal for Business Use: Savings Accounts are meant for personal savings and are unsuitable for managing business finances, as they lack features required for business operations.


Now that you understand the Current Account and Savings Account difference, assess your needs and make an informed decision appropriately. Choosing the right type of a Current Account or a Savings Account lets you enjoy maximum benefits and provides you with crafted banking solutions.

Latest Comments

Leave a Comment

200 Characters

Read Next

Current Account Statement: Definition, Uses, and Examples


What Is Deflation? Definition, Causes, and effects


Time Value of Money ( TVM ) – Definition, Formula & Example

Load More

Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.