What are the benefits of a Current account and Savings account
Almost everyone has a bank account. However many people are less aware of the difference between a savings account and a current account and their benefits.
Let us tell you what is the main difference between them and what are their benefits.
Having a bank account has become an important need of every person today.
From salaried employees to farmers and housewives and students to businessmen, there is a need for a bank account.
Two types of accounts are opened in every bank – Savings Account and Current Account.
Even though both these accounts are used for deposits and transactions, they are not the same. There is a big difference between these two accounts.
You can open a savings account alone or jointly. Interest is available on this from 4 to 6 per cent.
In most banks, it is necessary to keep a minimum amount to keep it open.
There are many types of savings accounts like regular savings accounts, salary savings accounts, and zero balance savings accounts and there are some specific savings accounts for senior citizens as well.
At the same time, the current account is good for regular transactions. This account is for those people who do business or daily transactions.
These accounts are mostly kept by business organisations, firms etc.
There is no limit to depositing and withdrawing money.
No interest is earned on the current account.
Savings Account Vs Current Account
1. A savings account is a deposit account in any bank, which allows limited transactions to the account holder. Whereas the current bank account is for daily transactions.
2. A savings bank account is to open an account for salary earners or monthly income earners or for savings.
It can also be opened in the name of a minor. At the same time, the current bank account is good for those doing business i.e. businessmen.
It can also be opened by Startup, Partnership Firm, LLP, Private Limited Company, Public Limited Company etc.
3. Customers get interested in savings bank accounts but no interest is available on the current account.
4. You can withdraw only that much money from the savings account, which is in it.
If you try to withdraw more money than that, the bank alerts you that your balance is not that much.
But this facility is available in the current account i.e. you can withdraw more than the balance present in it. This is called an overdraft facility.
5. Like the savings account, it is necessary to maintain a minimum balance in the current account.
However, the minimum balance of the current account remains slightly higher than that of the savings account.
6. Since the deposit in the savings account earns interest, it is subject to tax. But, the current account is out of it.
7. There is usually a limit for monthly transactions from the savings account.
You cannot do more than a specified number of transactions. But there is no such limit for the current accounts.
8. There is no maximum limit on the maximum balance in the current account. But there is this limit in the savings account.
Benefits of Savings Account
In savings accounts, a 15 to 30 per cent discount is available on most of the locker fees. Many banks offer life and general insurance with the account.
Interest is available from 4 to 6 per cent in this, some banks give interest up to 7 per cent. This account can be used to pay credit card bills or other utility bills.
To trade in the financial market, it is necessary to have a savings account.
Read:- Hidden charges in saving account
Advantages of Current Account
With the demand draft facility in the current account, it becomes easy to deposit and transfer money.
In this, banks provide facilities like doorstep banking, telephonic banking, and online banking.
This account also helps in taking loans. Its customers can transact from any branch anywhere in the country.
Where can we open these accounts?
You can open these accounts in any nationalised bank in India. Every bank recognized by RBI and registered on the national level has options for Savings and Current.
You can choose the account according to your requirements.
Eligibility For Account Opening In Bank?
The person should be an Indian Citizen. NRI can open the NRI Accounts.
For opening a bank account in India the person should be at least 18 years old.
If it’s a child account the parents can open the account later it can be transferred to the child when he/she turns 18.
The person opening an account must have the required documents:
- Valid Pan Card
- Residence Address Proof
After approval of the application, you will have to give an initial deposit according to the account variant.
Which is the best bank for opening an account in India?
Banks like HDFC (The largest bank in India), ICICI, AXIS Bank, SBI Bank, IDFC First Bank, Kotak Bank and IndusInd banks are popular banks in India.
Private sector banks have more facilities and smooth operations for accounts and other services.
HDFC & ICICI banks have more Branches and ATMs. Banks also provide doorstep services.
Do we need a good CIBIL Score for account opening?
Banks don’t require Credit scores for account opening. You can open a savings account without or with a low Credit Score.
However, you must have a good CIBIL Score while applying for a loan or credit card.
Read: Best credit cards in India
Can we apply for loans & credit cards with our savings account?
Banks generally give direct offers to their account holders. You can directly apply for loans and credit cards from your account.
Having an account in the bank also helps you to get faster approval and easy processing.
Sometimes banks also give special products and service offers to some eligible customers.
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