Salary Account vs Current Account
Last Updated : March 18, 2024, 5:13 a.m.
There is confusion among many companies which account would be the best to carry their transactions and other financial activities. They are confused between the salary account and the current account because both of them provide banking services. But there are many differences between Salary Account vs Current Account that we are going to explore in this article. One of the major differences between these two accounts is that the Salary Account is opened by the employers to credit the salary of their employees to that account whereas the current account is opened by the businessmen, traders, and wholesalers to deal with the day to day transactions. The employer always opens a salary account for its employees but it might open a Current Account for itself. Let’s move on to some other differences between these two accounts.
Difference Between Salary Account and Current Account
You can go through the major difference between these two accounts in the table given below. You can see the basis of the difference between these two accounts and choose the account as per your needs.
| Basis of Difference | Salary Account | Current Account |
|---|---|---|
| Purpose | The salary account is opened by the employer to credit the salary of its employee to the same account. | A current account is usually opened by businessmen, firms, traders, and advocates who have to do a lot of transactions on a daily basis. |
| Suitability | This account is suitable for the employees because they receive their monthly salary into their salary account. | This account is suitable for businessmen because they can make frequent transactions in a day or a month without any limit. |
| Relationship | There must be a relationship between the employer with the bank in order to open the salary account. | The businessman or trader must have a good relationship with the bank to open the current account. |
| Overdraft Facility | You will not get any overdraft facility in your Salary Account. | The Current Account holders get the overdraft facility and it means that they can withdraw money exceeding the available amount in their account. |
| Interest Rate | You can earn interest on the balance that is with the bank. | No interest is given by the bank on the balance remaining in the current account. |
| Number of Transactions | The bank charges a high fee after you make multiple transactions. | There is no limit to the number of transactions done in a current account. |
| Minimum Balance | There is no need to maintain a minimum balance in a salary account and no extra fee will be charged. | You will have to maintain a minimum balance in your current account and the bank will charge if the available amount goes below the minimum balance. |
| Debt Facility | You can get a credit card if you have a salary account because you receive a regular in that account. | It is not easy to get a credit card if you have a current account but you can enjoy an overdraft facility in that same account. |
Take Away
So, after exploring all the differences between the Salary Account vs Current Account, you must have analyzed that the current account is only suitable for the people who make frequent transactions in a day or a month. On the other hand, if you want to just save and build funds then the salary account would be a better option.