Saving and current account are the terms which you will hear when you go to bank for opening an account with bank. However they both are different and that is the reason why an individual should know the differences between saving and current account –
- Saving account is opened by individuals for personal purpose and not for business purpose and that is the reason why the target group of saving account are students, housewives, salaried individuals and so on, whereas current account is opened for business purpose and therefore they can be opened by individuals who run sole proprietorship business, partnership firm or company.
- Under saving account one gets interest on the amount kept with bank whereas current account are zero interest account in the sense that one does not get any interest on the amount kept with the bank.
- The main aim of saving account is to promote savings of people by offering them various products which provide returns in the form of interest to savers of funds while the main aim of current account is to help business class people in doing their business by offering them products which make their task of doing financial transactions with third parties easier.
- There is fixed limit on withdrawals or using checks in case of saving bank account which varies from bank to bank whereas current account is for business purpose and hence there is no limit on withdrawals or number of checks issued for payment to third parties.
- Minimum balance requirement in case of saving account is always lesser than the minimum balance requirement in case of current account.
- Current account-holders can avail the facility of bank overdraft in case they require funds while saving account-holders cannot avail the facility of bank overdraft.
- Know your customer (KYC) norms for opening saving account are less stringent as one address proof and one identity proof is enough while in case of current account KYC norms are stringent in the sense that bank asks for registration document of business, introduction from existing current account holder of the bank, PAN card apart from address and identity proof.