Current Account vs Savings Account: Which is Right for You?
July 05, 2025

There are significant differences between a Current Account and a Savings Account. While a current account is a non-interest bearing account meant specifically meant for business transactions, a Savings Account allows you to withdraw and deposit money for any purpose and earn interest on the account balance. This guide outlines the key differences between a savings account and a current account so that you can make an informed decision. Let’s dive in!
Current Account
A current account is designed for businesses to manage daily financial transactions. It offers online banking, 24/7 customer support, and chequebook facilities. With a current account, you can easily handle payments and receive client funds. Point to note: you won’t earn any interest on your current account balance.
Savings Account
A savings account is tailored for individuals who want to save money and earn interest on their deposits. It’s a secure place to store money while still allowing easy access when needed. Savings accounts also offer benefits like ATM cards and mobile banking services.
Comparison of Savings Account and Current Account:
1. Purpose: Savings vs. Current
- Savings Account: Suitable for individuals who save money over time and earn interest.
- Current Account: Ideal for businesses requiring frequent transactions, like paying suppliers or receiving client funds.
2. Minimum Balance Requirements
- Savings Account: Generally, has lower minimum balance requirements, making it more accessible.
- Current Account: Often requires a higher minimum balance due to higher transaction volumes.
3. Interest Rates
- Savings Account: Provides interest on deposits, which varies between banks.
- Current Account: Typically, does not offer interest, as it’s mainly used for transactions.
4. Transaction Limitations
- Savings Account: May have a limited number of monthly free transactions, with additional charges for excess usage.
- Current Account: Allows unlimited transactions, making it suitable for business needs.
5. Overdraft Facility
- Savings Account: Generally, doesn’t offer an overdraft facility, limiting withdrawals to available funds.
- Current Account: Often includes an overdraft facility, providing flexibility in managing cash flow. Please note that Ujjivan Small Finance Bank does not offer current account with overdraft facilities.
6. Accessibility to Funds
- Savings Account: Offers access to funds, but with possible restrictions on free ATM withdrawals or transfers.
- Current Account: Provides immediate access through cheques, debit cards, and online banking, making it ideal for frequent business transactions.
Final Thoughts
Choosing the right account depends on your specific needs. A current account suits business owners with frequent transactions, while a savings account is better for individuals looking to save and earn interest. Before making your decision, consider factors like minimum balance requirements, interest rates, transaction limitations, and additional benefits.
Simplify your business transactions with Current Account. Open a Current Account with Ujjivan Small Finance Bank and enjoy multiple benefits.
Disclaimer:
The contents herein are only for informational purposes and generic in nature. The content does not amount to an offer, invitation or solicitation of any kind to buy or sell, and are not intended to create any legal rights or obligations. This information is subject to updation, completion, amendment and verification without notice. The contents herein are also subject to other product-specific terms and conditions, as well as any applicable third-party terms and conditions, for which Ujjivan Small Finance Bank assumes no responsibility or liability.
Nothing contained herein is intended to constitute financial, investment, legal, tax, or any other professional advice or opinion. Please obtain professional advice before making investment or any other decisions. Any investment decisions that may be made by the you shall be at your own sole discretion, independent analysis and evaluation of the risks involved. The use of any information set out in this document is entirely at the user’s own risk. Ujjivan Small Finance Bank Limited makes no representation or warranty, express or implied, as to the accuracy and completeness for any information herein. The Bank disclaims any and all liability for any loss or damage (direct, indirect, consequential, or otherwise) incurred by you due to use of or due to investment, product application decisions made by you on the basis of the contents herein. While the information is prepared in good faith from sources deemed reliable (including public sources), the Bank disclaims any liability with respect to accuracy of information or any error or omission or any loss or damage incurred by anyone in reliance on the contents herein, in any manner whatsoever.
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FAQs
1. Can I earn interest on my current account balance?
No, current accounts generally do not offer interest as they are used for transactions.
2. What is the minimum balance required for a savings account?
Minimum balance requirements for savings accounts vary by bank but are generally lower than current accounts.
3. Can I withdraw more than my available balance in a current account?
Yes, the overdraft facility in a current account allows withdrawals beyond the available balance up to a set limit. Ujjivan SFB does not offer current account with overdraft facilities.
4. Is there a limit on transactions in a savings account?
Yes, savings accounts may limit the number of free transactions per month and charge for exceeding them.
5. Can I use a savings account for business transactions?
It’s possible, but a current account is recommended for separating personal and business finances.
6. Can I open both a current account and a savings account with the same bank?
Yes, many banks offer the option to open both types of accounts.
7. Do savings accounts offer an overdraft facility?
Typically, no.
8. What are the fees for non-maintenance of the minimum balance in a current account?
Fees vary by bank, so checking with your specific bank for details is important.
9. Can I convert my savings account into a current account?
Yes, but you’ll need to meet the criteria and follow the process set by your bank.
10. Are there any charges for closing a current account?
Some banks may charge a fee for closing a current account, especially if it's closed within a certain period after opening.
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