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what is the difference between savings bank account and
current bankink account?
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Answer Posted / m.j. subramanyam
A savings bank account, as the name implies is mainly
intended to facilitate savings of money earned. That is
small depositors can park their liquid money in this
account. In view of this, the number of withdrwal will be
limited. This type of account is useful for salaried and
low income group of people who whould like to save some
amount every month for their future emergencies. The bank
gives a nominal rate of interest based on the minimum
balalnce mainatained between 10th and last day of the
month. Transactions will be less as the main purpose of
this account is to save money for future requirements.
On the other hand, current acccount, also called
transaction acccount, is preferred by business people as
the number of deposits and withdrawals are unlimited.In
view of this, the bank pays no interest on this account as
it maintains customer's account for him. Since no
restrictions are placed on the number of withdrwals as well
on deposits in a day, this is best suited to the needs of
businessmen. Once in a quarter or half year, incidental
charges are collected by the bank. Individuals can also
open this type of account, but they will not get any
interest on this type of account. So salaried and low
income people open savings bank account.
Banks normally do not allow clubs, asscoiations, trusts, to
open savings bank accounts as they are not in the nature of
savings account.
M.J. SUBRAMANYAM, BANGALORE
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