Differences Between a Savings Account and a Current Account


  • What makes a Savings Account different from a Current Account?
  • Know about all the prominent differences between them in this post

Having a Bank Account is one of the primary needs of people these days. A bank account helps individuals keep the money safely there and carry transactions through the same. There are basically two types of bank accounts that you can open – a savings account and a current account. A Savings Account is a banking product that helps individuals save their hard-earned money safely in the bank. It helps people in developing a habit of saving money from an early age itself. On the other hand, a Current Account is a kind of running account that helps people carry out large scale transactions (both deposits & withdrawals) on a daily basis.

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You must have pressed ‘Savings Account’ multiple times while withdrawing the money from the ATM without knowing how different it is from a current account. Well, now would be the perfect time to understand the differences between a Savings Account and a Current Account in detail. Let’s read further to know the same.

What are the Key Differences Between a Savings Account and a Current Account?

Savings and current accounts can be differentiated from each other based on various factors such as suitability, the availability of interest, minimum balance requirements, withdrawal terms, etc. These factors will help determine the level of ease and flexibility for people opening these accounts. Let’s discuss these factors without any further delay.


As the name suggests, a Savings Account helps people save their hard-earned money by depositing it into the account and most suitable for those individuals who are getting a fixed monthly income i.e. Salaried Individuals. Besides, one can have savings accounts for his/her minor children or any of the family members. On the other hand, a Current account proves to give the best results to people who don’t have a fixed monthly income and generally do high-volume transactions daily i.e. Businessmen, Firms, Government Bodies, Institutions, Societies, etc.

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People who want to access their accounts frequently usually like to choose a Current Account as it provides the required flexibility to make quick transactions. Whereas, a Savings account can be useful for those people who don’t like to make frequent transactions and only want to save and also earn interest on the same. So, based on the suitability, a customer can identify differences between a Savings Account and a Current Account.

Interest on the Account

One of the major differences between a Savings Account and a Current Account is the interest that individuals can earn on the deposited amount. The money deposited in the savings account can make customers earn interest, whereas there is no such facility in a current account. Consider a current account as a no-interest bearing banking deposit. The reason is quite simple: customers open a current account for business purposes whereas a savings account is for saving purposes.

Savings Account Interest Rates usually range from 2.25 to 4% per annum on average and calculated on the daily outstanding balance. Though it changes from one bank to another. Also, a few banks offer higher interest rates on maintaining a higher savings account balance. Customers always look for higher interest rates on their savings account so that they can earn more in the long run. We are showing savings account interest rates of top banks. Please have a look.

BankSavings Account Interest Rate (In Per Annum)
State Bank of India (SBI)2.70%
HDFC Bank3.00% - 3.50%
ICICI Bank3.00% - 3.50%
Punjab National Bank3.00%
Bank of Baroda2.75%
YES Bank4.00% - 5.50%
Union Bank of India3.00%
Kotak Mahindra Bank3.50% - 4.00%
Canara Bank2.90% - 3.20%
IDBI Bank3.00% - 3.40%

Cash Withdrawal Limit

People like to use their accounts for cash withdrawals. But there is a huge difference between a savings account and a current account when it comes to withdrawal limits. Since a current account is used for individuals who like to make frequent transactions, banks don’t put any limit on the number of withdrawals. A customer can withdraw cash from his or her current account for as many as times he/she wants to make without paying any extra charges. On the other hand, banks put a pre-decided limit on the number of withdrawals on a savings account. On making any withdrawal above the fixed limit, customers may have to pay additional charges for transactions.

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This withdrawal limit generally tends to change from one bank to another and also depends on the type of savings account that a customer has. So, you should check before choosing a savings account.

Minimum Balance Requirements

When we are talking about the differences between a savings account and a current account, it is crucial to know about the minimum balance requirements. Banks ask customers to maintain a certain average monthly or quarterly balance in their savings and current accounts. The minimum balance requirements are usually higher in current accounts as compared to savings accounts for obvious reasons. But you should keep this in mind that minimum balance requirements tend to vary from one bank to another depending on the account holder’s location type – Urban, Semi-urban, Metro, and Rural.

However, there is a certain type of Savings Account that doesn’t ask you to maintain a minimum balance – Zero Balance Savings Account. With this account, banks don’t charge any fee if a customer is not maintaining the average monthly or quarterly balance.

Same as minimum balance, banks also ask for a minimum opening balance that also tends to be higher in a current account as compared to a savings account.

Passbook Facility

A Passbook helps customers keep track of the transactions happening in the account. This lists the number of debits and credits to/from the account datewise. One of the prominent differences between a savings account and a current account is customers get the passbook facility in savings to account whereas they don’t get in the latter. Banks don’t issue any passbook to the customers who have current accounts on their names.

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However, customers of both Savings and Current accounts get a statement of their account without any extra charges. So, this is a facility that banks provide to both accounts whereas the passbook facility is available to only savings account holders.


Banks ask for certain documents when you are going to open a bank account. Without submitting proper documents, your account opening application may get rejected. Documentation is one of the key differences between a savings account and a current account. While you need to submit a basic KYC Document ( Age Proof, Address Proof ) and recent passport size photographs of yourself to open a savings account, you will need a long list of documents for a current account that we have shown below.

  • Valid KYC Documents (Age Proof & Address Proof ) – PAN Card/Aadhar Card/ Passport of individuals as well as entities
  • A certificate of incorporation and memorandum of association is required in the case of companies and trusts
  • A partnership agreement is required in the case of partnership firms
  • Passport size photographs of the applicants
  • Cheque from existing savings account for opening the current account
  • Companies should provide the address of the communication
  • Proof of Entity Existence: Trade license/ GST Identification Number/ SSI Certificate/ IPR Registration, etc

So, you can see that the documentation process to open a Savings account is quite easier than a current account. The application process can be done both online and offline.

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