27 C
Abuja
Friday, January 22, 2021
- Advertisement -
Home ✔Naija HB Special What is the difference between current & savings account?

What is the difference between current & savings account?

Savings and current accounts are the two most popular accounts Nigerian banks offer its customers. In this article, we will be telling you about the difference between the savings and the current account.

- Advertisement -

These two accounts have their benefits of savings and current account in Nigerian financial institutions. These two alternatives fulfil two different financial needs

When choosing a bank account, be it for your business or for individual use, it is important to know the difference between the two accounts.

Savings Account

A savings account is a bank account which one opens for the sole purpose of saving their money. With a savings account, the money deposited will earn some interest on your balance.

The interest you get is determined by the amount you have deposited in the account and certain conditions like maximum withdrawals made in a month.

 Difference between savings and current account
Difference between savings and current account

For example, for some banks, some savings account are not supposed to withdraw more than two to three times to enjoy the interest rate for that month.

Therefore, it will not be wrong to say that a savings account is arguably, the best choice for an individual who earns a regular income and wants to save.

Moreover, it is ideal for SMEs who can consider it an option to save their profits.

- Advertisement -

Also, those who want to save up for their wedding expenses, vacations, or even want to purchase a house or a car could take advantage of the savings account to help them bring their dreams into reality.

It is an easy way to manage your extra finances and multiply your income. There is only a limited transaction allowance per month.

current Account

Current account The name of this type speaks for itself as well. Such accounts are usually created by small businesses, public people, companies, and individuals who need to use bank transactions.

It doesn’t mean the transactions have to be regular ones. Frequent operations with money would also work. Such accounts are flexible. Money comes and go.

A person who has such a bank account can work at a company or be a businessperson whose number of transactions through the current account is not limited to a particular figure.

This account comes with a cheque book and an unlimited amount of daily withdrawal.

 Difference between savings and current account

Difference between savings and current account

There are a number of differences which a bank user should take cognisance of before opening a bank account.

Purpose

One of the differences between current and savings account is that a savings account is designed to save money. While a current account is one where you deposit money to carry out business transactions. 

Saving accounts enables you to you save up for something important as we mentioned earlier or for an emergency while current account is suitable for business enterprises and firms that make regular transactions.

Interest

While an account holder deposits their money in a savings account, it earns some interest depending on the bank. On the other hand, with a current account, banks generally do not provide interest on deposits.

Restriction

With a current account, there is no restriction on the number of deposits and withdrawal made. Since there is no restriction, the bank makes the charges according to the number of transactions.

In the savings account, there is also no restriction on the number of deposits that is made into the account. However, there is a limited number of withdrawals.

If one exceeds the withdrawal limit, then for subsequent withdrawals, charges apply

Required balance

Unlike the current account balance, the savings account balance can be low. But the balance in a current account has to be high.

Duration of account

There is an end date for Current accounts. Once it gets to the end date, the owner has to renew the account. While saving accounts have no end day. Only the client can request to close it.

conclusion

It is pertinent to note that both these accounts have their own set of benefits and drawbacks.

So it is up to the account holder to decide which account is best for them. The decision should be made based on their account needs and we hope this article was helpful.

- Advertisement -

Please leave a comment below. However, for your comment to be approved, it must meet with our community guidelines. Views expressed below are those of their authors. Therefore, Neither NaijaHomeBased nor any of its employees can be held accountable.

- Advertisment -

just in

How to Link Your NIN with Your Phone Number (For MTN, Glo, Airtel & 9Mobile)

Find out the simple steps you can follow to link your NIN with your SIM or phone number so as to avoid disconnection. The Nigeria...

Airtel 3G/4G Data Plans 2020: Subscription Codes & Price List

Keep reading to discover all the various Airtel data bundles, including their subscription codes, cost, and validity period. As a matter of fact, Airtel Nigeria...

Is JAMB Mock Exams Compulsory? Is it Free?

We've been receiving a lot of questions lately regarding JAMB Mock exams; many people are interested in knowing if it is compulsory or not....

How to Check Ecobank Account Number

Did you forget or lose your Ecobank account number? If that's the case, then have no fear because in this guide you'll learn how...

CONNECT WITH US

16,800FansLike
1,300FollowersFollow
67FollowersFollow
26,500SubscribersSubscribe