Savings Account and Current Account

There are many bank account types which are offered in India by banks. To concise it, mainly 4 types of accounts are maintained- current account, savings account, recurring deposits and fixed deposits. And the most commonly used in all the above 4 is savings account.

Savings account are maintained by the individuals to stash their savings in one place and withdraw it whenever required. The reason why the individuals prefer this account is because they offer interest rates (generally 4%) on the amount. And on top of that the banks provide other banking facilities like cheque, withdrawals, etc. Also, there is a tax benefit of up to 10,000 rupees interest earned per year. If an individual earns beyond 10,000 rupees as tax, then they would be charged tax.

On the other hand, current accounts just cannot be used for saving purpose. These are used to facilitate business transactions and is generally owned by companies.The benefit of these accounts are to indulge in multiple transactions. Also the account owner has the facility of overdraft, ie using more amount of money than what is available in the account.

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