Distinguish between the following: Current account & Savings account

Question: Distinguish between the following: Current account & Savings account

To understand the banking structure, it is essential to differentiate between the two most common types of bank accounts: Current Accounts and Savings Accounts. Below is a detailed comparison based on their purpose, features, and target audience.

Comparison Table

Basis of Difference	Current Account	Savings Account
Primary Objective	To facilitate frequent business transactions and fluid money management.	To encourage savings among individuals and earn interest on idle funds.
Target Audience	Businessmen, companies, firms, and public enterprises.	Salaried employees, students, senior citizens, and regular individuals.
Interest Rate	Generally, banks do not pay interest on current accounts.	Banks offer a modest interest rate (ranging from 3% to 6%) on the balance.
Transaction Limits	There is no limit on the number of transactions (deposits/withdrawals) per day.	There are usually restrictions on the number of withdrawals per month.
Overdraft Facility	Overdraft facility is available (account holders can withdraw more than their balance).	Overdraft facility is generally not available.
Minimum Balance	Requires a higher minimum balance to be maintained.	Requires a comparatively lower minimum balance.

Key Takeaway: A Savings Account is designed for saving money and earning interest, while a Current Account is strictly for managing high-volume business transactions without the benefit of interest.