Difference Between Current Account and Savings Account
28 Jul 2021

Savings vs Current Account: Which One to Choose? | DBS Bank

Find out all about the differences between Current and Savings Accounts

Key Takeaways

  • Banks offer different types of current and savings accounts
  • Savings accounts help you deposit and grow your corpus, while current accounts are ideal for everyday transactions
  • Current accounts come with a higher frequency of transactions as compared to savings accounts
  • While you can earn interest on savings accounts, this facility is not offered with current accounts.
  • You can utilise overdraft facilities and apply for personal loans with current and savings accounts, respectively.


It is always better to have as little of it on your person or in your home when it comes to cash. Instead, you should store it securely in bank accounts. A bank account allows you access to your funds anytime through different platforms. It also empowers you to grow your corpus strategically over time. Furthermore, you get access to a world of facilities – from internet and mobile banking to instant money transfers, cashback and reward points and more.

Typically, most people own and operate two types of bank accounts – Savings Accounts and Current Accounts. Let us find out the difference between Current and Savings Account, starting with their definitions. We shall also assess their similarities in this article.

Savings Account

As the name suggests, a Savings Account is one in which you can park your excess money or your savings. Here, you can deposit the funds that you do not need currently but may require some time in the near future. Each time you deposit money into this account, your savings continue to increase. You also earn interest on the savings parked on an annual or bi-annual basis, and the interest rate differs from bank to bank. Typically, you get anything from 3.5% to 6% interest on your savings.

With DBS Bank app, you can open a new savings account in a few minutes! Download the app to get started.

Current Account

If you own a business, be it a retail or grocery store a multi-national company, you may need to withdraw and deposit large amounts of funds every day. For such transactions, you need a Current Account.  Unlike Savings Accounts, Current Accounts are non-interest bearing accounts, but they come with high daily deposit and withdrawal limits. As a Current Account holder, you get access to several facilities that can help your business, short-term loans, overdraft facilities, and more.

Current vs Savings Accounts – The Differences

Now that we know the fundamental Current and Savings Account differences, let us compare the two. Primarily, there are 4 points of difference between these two types of bank accounts.

  1. The Purpose

    Savings Accounts are designed to enable account holders to save and grow their money. Banks offer an incentive in the form of interest on the savings parked, which contributes to the growth of the corpus. Conversely, the Current Account empowers you to conduct your everyday business transactions without any hassles. To ensure there is no shortage of funds, banks over loans and overdraft facilities to Current Account holders.

  2. Transactions Permitted

    Savings Accounts generally come with certain specific limitations when it comes to transactions. For instance, you can withdraw funds from your account at ATMs and bank branches only a particular number of times each month, ranging from 3-5 times, depending on banks.

    If you exceed the number of transactions permitted or use other bank ATMs beyond the permitted limit, you may be charged a fee. As for Current Accounts, there are no caps or restrictions on deposits or withdrawals. You may withdraw money several times a day, if needed, without any hassles.

  3. Balance Maintenance

    Another point of difference between a Savings Account and a Current Account surrounds the requirement of balance maintenance. Your bank typically requires you to maintain a specific amount in your Savings Account at all times to keep it operational. The balance amount may be as small as INR 500, or upwards of INR 10,000, depending on your bank. With Current Accounts, you have to maintain higher balances, which may be upwards of INR 50,000 or INR 100,000 at all times, depending on the account type.

  4. Borrowing Money

    Current Account holders can utilise the overdraft facility to withdraw more money from their account than their actual balance. If a Savings Account holder needs more money than their balances, they can use Personal Loans. If you already have a Savings Account with the bank, you can get Personal Loans quickly.

Similarities Between Current And Savings Accounts

Having examined the Current Account and Savings Account differences, let us learn how they are similar.

  • Both Current and Savings accounts are designed to address your various financial needs and help you manage your money.
  • Both accounts come with basic facilities like internet banking, ATM-cum-debit cards, individual and joint account facilities, etc.
  • There is no specific or prescribed limit on the money you can deposit in either account.
  • You can choose from an array of Savings and Current Account types.

Now that you know the differences between Savings Account and a Current Account, you can choose to open one that best suits your requirements. Remember to select a bank that offers access to your account through different portals, including internet, mobile, and SMS banking, UPI transactions, international ATM-cum-debit card, and more.

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*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.