Are Savings Account and Checking Account the Same?
At the time of an ATM or other transaction, you will have the option of using your savings account or your current account.
Are you sure you are familiar with “savings” in a savings account and “operations” in a current account? Banks use the amount deposited in your current account and savings account to give you a home loan, a personal loan, etc.
We have also seen many people with a savings account who do not even know whether they have a savings account or a current account.
What is the difference between a savings account and a current account? Which account should a person open? We are telling you in detail about the features and limitations of both of these accounts.
What is a Savings Account?
A savings account is such an account run by banks, in which they pay interest on the amount kept. Usually, business transactions are not done from this account. Any person can open this account, either singly or jointly.
Usually, no maintenance charge has to be paid for this account. Keep in mind that any transaction above Rs 10 lakh in a savings account is reported to the Income Tax Department. Usually, a person opens a savings account to deposit some of his savings.
Savings accounts are generally opened by small savers, small businessmen, salaried workers, or people with regular income. Similarly, students, pensioners, and senior citizens need to open such accounts.
There is a Separate Provision for Interest on the Budget Account
The interest on the savings account is also nominal. Although the interest rates on savings accounts have been deregulated by the Reserve Bank, most banks pay only 4 to 5 percent interest per annum, except for the 6 percent interest that some banks get on large deposits. To keep the savings account running, a very small amount needs to be kept in it.
Commercial banks and cooperative banks accept public deposits through savings accounts with them. Savings account in India: Rs. Can be opened with a deposit of Rs. 5000 to Rs. In a savings account, the account holder can withdraw money from the account whenever he wants.
Any number of times and any amount can be deposited in this, but it is mandatory to give a PAN number on deposits above 50,000, and if the amount seems higher than your income, then the bank manager will ask you about the source of this amount. may ask. Similarly, a limit is also fixed for the maximum number of transactions in a month.
There Are Some Rules in the Withdrawal System as Well
There are also some limits in terms of withdrawals. Money can be withdrawn from this either by withdrawal slip from the concerned bank, or ATM itself.
The savings account is perpetual, and there is no maximum period for which it can be held. No loan is available against the amount kept in the savings account.
An Electronic Clearing System (ECS) or e-banking facility is available on this account for paying the electricity bill, the telephone bill, and other daily expenses. Generally, people pay the EMI of a housing loan, personal loan, car loan, etc. from their savings account only.
Advantages of a Savings Account
Banks provide various facilities to the holders of savings accounts. A depositor holding this account can make payments by check to anyone.
Salaried or other people have the advantage that they can see their complete deposit and withdrawal details at the end of the year.
The passbook of the savings account is also valid as proof of a person’s identity and address.
The person holding this account can also transfer funds electronically to someone else’s account. Customers having a savings account can also do online shopping by availing of the internet banking facility.
A record of all transactions done by the account holder is kept in this account. People with this account can withdraw money immediately through an ATM if needed.
The Savings Account is Divided Into Several Parts
From the level of convenience, they are named as Basic, Regular, Saving Plus, etc. Talking about basic savings accounts, ATM cards, and IVR-based banking, a free withdrawal facility is available once a month.
Above this, the facilities of an international debit card, NEFT to fund transfers, a safe deposit locker, a sweep-in facility, mobile banking, bill payment, etc. are provided in the savings accounts.
And higher-level savings accounts offer facilities like international debit cards, personalized checks, payable at par checkbooks, intercity and multicity banking, discounts on locker rental, special discounts on the purchase of gold bars, etc.
Active ‘Current Account”
It is meant for businessmen, firms, companies, public enterprises, etc. who need to do multiple banking transactions every day.
Deposits or withdrawals can be made in the current account at any time without giving any notice. It is also good to pay by check to repay the loan. The most important advantage of current account holders is their overdraft.
Businessmen are given the facility of withdrawing more than the amount deposited in the account according to their turnover, profits, etc., but for this, some security is definitely taken from the businessmen.
Customers Can Deposit or Withdraw Any Amount They Want From This Account
Individuals, sole proprietorship firms, partnership firms, Hindu undivided families, limited companies, clubs, societies, trusts, executors and administrators, other government and semi-government organizations, local authorities, etc. can open a current account either singly or jointly. But no interest is earned on this account. There is no restriction on the number of times you can transact.
Only Then Open the Current Account
Current accounts are opened by businessmen who have to make regular deposits and withdrawals from banks. The purpose of opening a current account is so that businessmen can do their transactions easily.
Generally, banks do not give any interest on current accounts. But now some banks have also started paying interest on the current account.
The current account is also a perpetual account and does not have any fixed tenure. If a businessman with a current account wishes, he can make direct payments to his moneylenders with the help of checks.
Remember These Things
Moneylenders who lend to such account holders through interbank connections can also find out how his loan repayment history shows how much he can be trusted.
The increase in the current account is considered a sign of industrial progress in the country. Had this account not been there, the businessmen would have faced a lot of difficulty in their work.
Features of Current Accounts
Current accounts are of various types depending on the convenience and level of the businessman, such as premium current accounts, regular current accounts, flexi current accounts, etc.
These include local check collection and free payment facility, 24-hour phone banking, door-step banking (banking at your doorstep), free cash deposit, free facility to issue DD or PO on large amounts, free NEFT collection and payment facility, etc.
She goes. So when doing transactions from now on, remember about the facilities, advantages, and disadvantages of these accounts.