Current account vs Savings account – Do yo have issues picking the right type of account that would suit your needs and desires? Do you have issues picking between opening a Savings account and Current account? If you have any questions such as this, do read on. I will show you all you need to know about both types of account: How to open them and there limitations.
What is a Savings Account?
A savings account is an account that can be opened and operated by any individual mainly for the purpose of saving money.
A savings account usually comes with packages such as an ATM Debit card, on-line money transfer, Internet banking with interest on a daily or monthly basis, etc. This type of bank account cannot be opened by companies especially Public Limited company.
- A savings account encourages savings (helps you save)
- This account incurs interest on a daily or monthly basis
- Interest rates can run for about 4% to about 6%
- This account can be opened by any individual and requires a specified balance (minimum balance) to be kept within the account to keep it open always.
Related: How to Open a Domiciliary Account
What is Current Account?
A current account is a type of bank account opened and designed to allow frequent transactions. It is more suitable for individuals who carry out instant and frequent money transfers at all hours. It is best for businessmen, companies, organizations and public enterprises.
- Current accounts allows for regular transaction
- The Current account does not earn interest at all
- A minimum balance is not required to keep the account open
Key Differences Between Current Account Vs Savings Account
- Savings account is meant for saving money requires for future financial prospects while Current account allows for day to day transactions.
- Savings account is appropriate for individuals that earn salaries; that is, for regular savings. Current account on the other hand is perfect for business organization who need and deal with frequent financial transactions
- Savings account allows restrictions on daily and monthly transactions while Current account has no restriction on the amount of transactions carried out any current account.
- Savings account earns interest regularly ( usually between 4% and 6%)why current account earns no such interest.
- Bank overdraft is allowed only in Current account and not in Savings account.
- The opening balance is required to start a savings account is very small. In contrast, current account needs a very high amount when opening a current bank account.
Similarities Between Savings Account And Current Account
- Current account and Savings account both demand that money be deposited in them from time to time.
- Internet baking platform can be accessed on both types of account.
- Both accounts can have access to mobile banking systems
- Both accounts have Multicity cheque facility.
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I do hope this tutorial helps you when it comes to picking the exact type of account that soothes your needs. If you have any questions with regards with this types of account, do ensure to place a comment below.
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