Here we will discuss the difference between a savings account and a current account. And you will also get to know how you can get almost 8% interest in your saving account or current account.
Everybody in this world who are using a saving account or a current account is hardly getting 3-4 % of interest yearly. That is why we want don’t want to keep our money in our normal savings account.
At least we do fix deposits where get 5-6 % interest maximum in a year. Here we will discuss how you can get the maximum interest of 8% in a year.
Maybe we need to tell some hidden truth about the banks but it will help you. This is just for my readers, my followers. As well as there is a big confusion.
Which is- If a person wants to open a savings or current account then which bank will be better for the person ?. The reason for this confusion is, there are many government banks, private banks, small finance banks, payment banks available in the market.
We will also tell you that which bank will be better for you.
|SAVING ACCOUNT||CURRENT ACCOUNT|
|1.It has a transaction limit.||2.No limit of transaction.|
|3.Not allowed to do business transactions theoretically.||4.It is for business transactions.|
|5.No OD (overdraft) facility is available.||6.Here you can get an OD (overdraft) facility.|
You can see that the facility of a current account is more than a saving account. Now you can say that -why people don’t open a current account just for normal use then ?.
The first reason is- it is for business and secondly, in the saving account you will get at least a minimum percentage of interest in the saving account but you can’t get any interest percentage of interest in the current account.
Transaction limit (Current account and savings account difference)–
In the saving account, there is a transaction limit. It means that you can use that account to withdraw money or deposit money just 5 to 6 times in a month.
After that, the bank will charge a certain amount for that.
Because a saving account is not for frequent transactions. But in the current account, there is no limit of transactions.
You can withdraw money or deposit money as per your need. Bank will not charge for this.
Purpose of these accounts–
Current account and savings account difference- before you know about this in detail read this.
The current account is for business purposes. You can do business transactions through these accounts. But in the saving account, you are not allowed to do so many business transactions theoretically.
Like if a bulk payment is coming into your saving account ( It can be more than lac ) then it is possible that the bank will think of it as suspicious and can mark it as a flag. Then your account will be freeze.
After that, the bank can ask for justification of that transaction as they are thinking that maybe you are doing business from that saving account.
So it is very important that if you have a business then do it from a current account and to save the profit you are gaining from that business you can use your saving account.
What is an overdraft facility(Current account and savings account difference)–
Current account and savings account difference- here you need to know about an overdraft facility.
If you are doing a business then it is possible that sometimes you can face a problem which is the shortage of working capital. That means you need more money or cash to run the business.
In the current account, you will get a facility which is called OD facility or overdraft facility. For example, you need to 1 lack rupees to someone for business purpose.
But your account has only 50 to 60 thousand rupees in it. Then also you can pay 1 lack rupee if your account has an OD limit of 50 thousand or 40 thousand rupees.
The limit will be decided by the bank. It is based on how big is your account. But usually, you can’t get this facility in your savings account.
How to pick the best saving account and best current account–
It is a most important part of the topic of Current account and savings account difference.
The first thing you need to check is how much percentage of interest is that bank giving as well as you need to check that how much balance you need to maintain in that account.
Usually, there is a minimum maintaining balance criteria in every bank.
Like you need to maintain 5000 rupees on an average in every month or every quarter. You need to check that the minimum maintenance balance should be very low.
Because if you need to withdraw all the money for an emergency purpose then you need to give a penalty to the bank.
But you should check that the penalty amount should be very little to pay. You can choose the zero balance account also.
Some important things–
Current account and savings account difference is a vast topic. So you need to know this before you start.
Now here is an important thing we are going to discuss. Suppose you don’t know that which account you should open. In this, you will go to the bank and will as the customer care representative for a suggestion.
And you will open an account according to his/her recommendation. But this is wrong.
Because you need to understand that his/her recommendation will be the best for his/her profit or incentive but that may not be the best for you. So you need to research that very well and after that, you need to choose.
You can ask for the brochure or you can ask for the feature list of all the accounts.
Now you should not only focus on the features available in the bank account.
Because sometimes you are suggested that to open a big account where you need to maintain 50,000 rupees or 1 lac rupees and the bank will provide a dedicated relationship manager for you.
The manager will just serve you. But in reality most of the time you will not get these facilities. So it is good that to go with an account where you need to maintain a minimum balance.
Here is a most important point which is -you should open an account in that bank where you are getting the AUTO SWEEP facility. Now–
What is an auto sweep facility–
On the topic of Current account and savings account difference, you should know this.
Here you can decide that the money you have in your bank account will be automatically shifted into a fixed deposit and you will get the interest of fixed deposit after a certain amount.
As well as when you want to withdraw the money you can withdraw it normally and you don’t need to give any penalty charge on that.
Like you can say that the available money after 40,000 thousand will be automatically shifted to a fixed deposit.
And the amount you need to decide with the bank. Here it is giving you an interest percentage like FD but you don’t need to maintain the rules of FD. That is flexible.
Where a saving account is giving you an interest percentage of 3 to 4 percent, there if you have the auto sweep facility then you can get up to 8 % interest on a saving account. And you just need to go with this facility.
Debit card charges–
You need to check that how much amount you have to pay yearly for your debit card. This also should be very little to pay.
You need to check which bank is giving these debit cards as lifetime free cards or you can pay the minimum amount of 100 to 300 rupees yearly.
- Another most important point is about-NEFT, RTGS, IMPS. In this modern world, we are dependent on digital transactions.
That is why you should check that the online transfers in your bank should be free or the charge is very little.
Usually, if the IMPS is less than 1 lac then the bank can charge 5 rupees per transaction but there are few banks that don’t charge for this. This thing you need to know from the bankers.
The last important thing about saving an account is how many ATM transactions are free.? This also you should know from the bankers.
Most of the banks give 4-5 transactions free in a month but there are few banks that are giving unlimited transactions facility. You can check once. As well as you need to check that what is the EMI bounce charges in that bank.
There are many banks that are charging 600-700 rupees as an EMI bounce charge but there are many banks that are charging 200-300 rupees.
You should do that. Because if that happens for an emergency reason then this will actually give you pain.
You can understand that how it will feel to give 700 rupees a bounce charge in an emergency situation where you are not able to pay your EMI. This can happen to anyone.
Things you need to check before opening a current account–
This is one of the most important parts of the topic Current account and savings account difference.
1.You need to check the maintaining balance criteria first. As we discussed before this should be very little to pay.
Because you can understand that the cash flow problem can happen anytime in the business.
It is possible that you can’t maintain the required balance all the time. So it is very important to check this.
2. Most people do not know that you can also get an auto sweep facility in the current account also. You can also get up to 8% interest here also. But you need to search for that bank. Many banks are not giving this facility.
3. As you are doing business then many times you need to do the payment on a government website or you need to pay tax E.T.C.
So if you are opening a current account in a very small bank or new bank then it is possible that you will face some problems.
So prefer to open the current account in a reputed bank.
4. If you are using a credit card and if you pay the credit amount from time to time then it will impact your credit score. Like this, you may need to take loans in the future to grow your business.
So when you are opening a current account, talk with the bank that you want to take a corporate credit card in the name of your business.
Because if you use it and pay the credit amount from time to time then it will help you take a loan in the future easily.
Some special tricks–
This you can say a bonus tip for you in the topic Current account and savings account difference.
This will help you to get some special offers. Like always try to open an account in a new branch. Like If HDFC bank is going to open a new branch then try to open an account in that branch.
Maybe you need to travel a distance but it will give you some special offers because most of the time the bank run some special offer when they are opening the new branch. After that, you can transfer that account where you want.
As well as you need to calculate the effective return rates. Like how much interest is the bank giving to you as well as you need to check how much reward you will get when you are spending your money E.T.C.
There are many related questions on the topic of Current account and savings account differences. But here we will cover the most asked questions.
1.What are the benefits of a current account and savings account?
In the savings account, you deposit your saving in the bank and earn interest on the same, a current account is where you deposit money to do business transactions.
2. Is the current account tax-free?
A current account is a zero-interest account, there is no tax on the current account.
3.Can I convert my savings account to my current account?
It is not possible to convert your saving account into your current account as both the accounts are different in nature. And also have different features and benefits.
4.What is the benefit of a current account?
If you read the article carefully you will know that. It enables a business person to keep the flow of money smooth and the person can make payments on time.
Overdraft facilities are available to overcome any temporary cash flow issues. Also very handy for large transactions.
5.What is the limit of the current account?
It depends on the bank. You have to ask the banker to know the details.
If you have any queries on the Current account and savings account difference you can comment below.