07 AUGUST, 2023

Savings Account and Current Account are two different types of account a bank offers. While the former is for personalised savings, the latter is more suited for enterprises and individuals who need to carry out frequent business transactions.

Key Features And Difference Between Current Account And Savings Account


A Savings Account is used for personalised savings, for addressing liquidity needs, payments, investment of Individuals.

On the other hand, a Current Account is structured for companies, self-employed professionals, proprietors and partnership firms to carry out business transactions. Please Note that using Saving Accounts for business transactions is not allowed would result in paying high fees or charges /penalty.

Interest Earned

Money in a Savings Account earns a rate of interest which differs across banks. Interest earned on Savings Account up to Rs. 10,000 is exempt from taxation and the interest income above that is added to your income and taxed accordingly.

Current Account doesn’t fetch any interest. You can use all modes of payments for transactions like electronic/ Digital or cheque transactions and  also, you can withdraw money from a Current Account from ATMs when needed.

Free Transaction Limit

There’s a cap on the number of free transactions you can carry out in a month from your Savings Account. Just like rate of interest, it differs across banks. If you go beyond the number of permissible transactions, you will be charged for the transaction.

This is not the case with a Current Account. As this is designed for conducting business, Unlimited number of transactions are allowed in Current Account. Since businesses need to conduct transactions for a range of needs, there’s no limit on the number of transactions that can be carried out in a month from a Current Account.           

Also, as a Current Account customer, you get a large number of free cheques per month compared to a Savings Account holder.

 Additional Read: What eligibility criteria must you meet before opening a Current Account?

Overdraft Facility And Other Services

This is another feature of a Current Account. There are occasions when you might need to draw more money than what’s available in your account.

When you do so, your account is said to be overdrawn. A Savings Account doesn’t offer this facility, but a Current Account does.  Also, services such as making and accepting payments via point of sale (POS), QR codes and transaction portals, among others, are available in a Current Account but not in Savings.  

In Conclusion

Both Savings and Current accounts have their specific purposes. While the former helps you park your savings, the latter aids in taking care of day-to-day business transactions.

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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.