It can be pretty confusing for people who are not business-inclined, to know the difference between a current account and a savings account.
For a first-timer who visits any financial institution to open an account, the first thing that comes to mind is a savings account.
Sometimes, the banker does suggest that the person opens a current account depending on the amount of money or the occupation of the individual.
But does a current account attract an interest and are there limitations with this account? Does the ‘interest’ factor only have to do with the savings accounts?
In this report, GhanaWeb brings to light the difference between a savings account and a current account.
This account, also known as a financial account is a type of deposit account maintained by individuals who carry out a significantly higher number of transactions with banks on a regular basis.
There is no limitation on withdrawals and deposits in a day with this type of account.
Also, current account holders can make direct payments using cheques, demand drafts, or pay orders.
A current bank account is one of the primary requirements for starting a business because it allows for prompt business transactions.
It provides internet banking and mobile banking facilities.
Compared to savings account, a current account requires a higher minimum balance.
A current account can be operated by individuals, public and private companies, associations, trusts, etc.
Non-maintenance of the minimum balance can attract penalty charges.
If an individual does not want to be limited in his daily withdrawals and/or deposits, then he/she can request for a current account.
But the current account was created for businesses and/or companies.
With a savings account, it was designed to encourage savings. It is an ideal choice for any individual who earns a steady or regular income as a salaried employee.
People with short term financial goals such as vacation, financing a wedding, buying a car etc also make use of a savings account.
This type of account allows the account holder to deposit money at his/her convenience.
People with savings account can earn either a 4% or 6% interest on their principal amount.
Opening a savings account requires a pre-specified amount as a minimum balance.
A savings account can also be used to send and receive payments and it serves as a base for all transactions.
It is accessible for all age groups but has limited transactions in a day.