Earning a high income is as good as depositing it in the right financial products. For one, you can always deposit it in the savings or current account. Each of these accounts has different features, requirements and benefits.
However, to make the most of thesediverse attributes, you first need to know the key difference between them. Given below is all that you need to know about the saving and current account in the bank.
- The saving account normally refers to the account that is mean for individuals who want to keep their savings for further financial requirements. The current account, on the other hand, is an active account, which is most beneficial for day to day economic transactions.
- The saving account is designed to encourage the savings of the general public. The more funds are invested, the more the benefits the account holder will receive. On the other hand, the current account ensures frequent or regular transactions are made by the account holder.
- The saving account is most appropriate for salaried individuals. It can also be held for selected parties such as clubs, trust or an association of persons amongst many others for regular savings. With the current account in the bank, it is perfect for business entities, government departments, institutions and societies and other similar institutions, as they need to deal with monetary transactions on a daily basis.
- In the case of the accounts for savings, there is a restriction on the number of daily and monthly transactions. If the transactions exceed the specified limit, additional charges may be applied. In the case of the account for current, there is no restriction on the number of transaction amounts.
- The saving bank account offers interest on investment. In other words, depending on the amount you have in the account, you can earn an interest of 4 to 8%. However, the current account does earn interest.
- Certain benefits like passbook facilities are provided by the bank on the account for savings. This helps in listing the number of debits and credits, to and from the account. It also helps keep track of each transaction date wise. With the current account, no passbook is issued by the bank to the holders of thecurrent account.
- An overdraft facility is provided only to the current account. This helps businesses manage their accounts during crucial transactions, even though there is a low amount of funds invested in the account. This service is not provided to the savings account.
- Saving accounts require a minimum balance amount to open it. In contrast to this, the current account will require a high amount to start the account.
These are the key differences in the account. In order to make the most of your investment in either account, you can utilise these differences with the right investment amount and strategy.