Difference between Current Account and Savings Account

Difference between Current Account and Savings Account

25 January 2024 | By INDIE

Your financial journey often starts with a simple step – opening a bank account. No matter if your goal is to safely deposit money and earn interest over time or fuel your start-up, with large volume transactions, bank accounts help you with your finances in a million ways. To put it simply, a bank account lays the foundation for a stable financial future.

Savings and current accounts are the two most common bank accounts that play a non-negotiable role in the financial life of many. Both have their unique benefits, but they differ in their purposes and functionalities. To know which one meets your banking needs and expectations perfectly, first, it's important to know what sets them apart.

Savings Account meaning

A savings account is the most basic type of bank account offered by financial institutions. The main purpose is to let you deposit your money safely and earn interest on the balance. They provide a safe haven to set aside money for daily needs, future goals, emergencies, or planned expenses.

Current Account meaning

A current account facilitates large and high-value transactions. Businessmen, professionals, or entrepreneurs who want to manage their regular cash flow smoothly without being concerned about transaction limits may find these accounts more beneficial.

Major differences between Current and Savings Accounts

Following are the key aspects of current account vs savings accounts, based on purpose, interest earning, overdrawing, documentation, and transactional limits.


Businesses, such as shopkeepers, traders, companies, and service organisations, benefit from a current account. This is because the volume of transactions in a current account is usually high.

A savings account is ideal for individuals who want to deposit their salaries or income and use it to manage daily financial activities like sending/receiving payments, settling credit card bills, paying utility bills, making investments, etc.

Interest earnings

A big difference between current and savings accounts is interest accumulation.

A current account is usually a no-interest-bearing account. The main focus is to facilitate smooth daily operations rather than saving or earning interest. Banks already face high operational costs as these accounts are heavily operated. Offering interest would greatly increase these costs.

Savings accounts earn interest. Although the interest rates differ between banks and are usually nominal, you can open a savings account on INDIE by IndusInd Bank and avail interest rates of up to 6.75% p.a. For an even more lucrative option, turn to INDIE Fixed Deposits, where you can earn an impressive return of up to 7.50% per annum.


If you withdraw more money from your account than is available, your account is considered overdrawn. A savings account typically does not offer or allow overdrawing. You can't withdraw more than your account balance allows.

Most current accounts offer overdraft facilities, letting you withdraw funds beyond your available balance up to a pre-approved limit. This short-term borrowing option is useful to deal with temporary financial gaps or unexpected business expenses.

Account opening procedure and documents

To open a current account, business-related documents, such as a certificate of incorporation, memorandum of association for companies/trusts, and more are necessary.

With most savings accounts, you only need your PAN and Aadhaar card and camera facility on your mobile phone or desktop. Just complete the account opening process via video KYC (Know Your Customer) and start managing your finances instantly.

Transaction limit

Savings accounts usually have a limit on the number of cash deposits and withdrawals per month. Since a current account is meant for businesses, higher cash transactions are allowed to fulfil the frequent, large-scale deposit and withdrawal needs of companies.

This difference in cash limits reflects the specific uses of each account type: personal savings vs. business operations.

Current Account vs Savings Account | The bottom line

The final choice between a current and savings account depends on your specific needs. For business owners or entrepreneurs starting a business, current accounts with premium banking solutions can be beneficial. You get features like higher transaction limits, overdraft facilities, and instant credit options. However, if your goal is to save for future personal goals and get competitive interest rates, apply for an INDIE Savings Account today!

Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.