Though banks offer a variety of packages savings and current account are the most common types of accounts created by individuals or businesses.
A savings account is primarily for the purpose of saving. Depending on the bank, it requires little or no amount to create. The savings account also offers a certain percentage of earned interests for customers, which are guided by the bank’s terms and conditions such as a number of withdrawals within a specified timeframe. If you are opening an account newly and want to save for specific projects or future investments, then it is advisable to start with this account. Benefits of having a chequebook and third party transactions are not available for the savings account.
A current account, on the other hand, is suitable for business purposes with an unlimited number of withdrawals for running daily transactions. It requires a certain amount of deposit to create after which accounts can be withdrawn anytime till zero. Cheque books and third party withdrawals are offered in the current account system, making it available for the account owner to issue a cheque to a third party for withdrawal of cash. The account owner issuing the cheque is known as the drawer while the third party in whose favour the cheque is paid is called the payee. Interests cannot be accrued on current account.
The advent of online transactions has however made transfers convenient even for the holder of a savings account. Online banking allows customers make transfers from anywhere and to other accounts. Banks also create various generic packages to suit the needs of their customers but most of them are relative modifications of either or both of the savings and current accounts. Discuss various packages with your account officer to know the offer that best suits your needs.
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