Edited By Mary Wisniewski. Edited by. Mary Wisniewski. Mary Wisniewski is a banking editor for Bankrate. She oversees editorial coverage of savings and mobile banking articles as well as personal finance courses. Reviewed By Robert R. Reviewed by. Robert R. Johnson, Ph. Share this page. Bankrate Logo Why you can trust Bankrate. Bankrate Logo Editorial Integrity. Key Principles We value your trust. Bankrate Logo Insurance Disclosure.
Which bank should I choose? Get personalized bank recommendations in 3 easy steps. Get started. Checking account Savings account Primary use Spending Saving Interest Sometimes, but usually minimal Yes, interest rates vary by bank Common fees Monthly maintenance fee, overdraft fee, out-of-network ATM fee Monthly maintenance fee, minimum balance charge, savings withdrawal limit fee Minimum balance Varies by bank Varies by bank Common fees None Six per month in most cases.
Most current accounts don't pay interest on the balance. However, with competition rising, many banks and providers have started offering attractive interest rates if you meet the bank's requirements to be eligible. In recent years banks have started to offer attractive interest rates on selected currents accounts in an attempt to lure customers from rival banks. Often the interest rates available through these deals are higher than the returns available on many instant access savings accounts!
The main reason you might consider using a current account to save is if you are offered an attractive interest rate in return for leaving a significant balance in the account. However, it is not always that straightforward. Firstly, you will need to check whether you could get a better interest rate from a traditional savings account - you can compare accounts using our savings accounts table.
If the current account you have found beats all other contenders then it may be worth investigating the possibility of using a current account to save. Although some current accounts offer tempting headline interest rates, on closer inspection you are likely to find that it is not as straightforward as it may first seem. For instance there are usually a number of conditions that you must meet in order to actually get the advertised rate.
For starters, most will require you to deposit a certain amount of money in the account each month. Some may also require you to pay one or more direct debits from the account each month.
While this might not be a major issue if you plan to have your salary paid into the account, you need to check what is expected of you and whether you can meet it before you apply. Additionally, most high interest current accounts limit the balance that will earn the headline rate. As any money in excess of this threshold will earn interest at a far lesser rate it is not worth keeping any extra money in the account.
Transferring the extra to a high interest savings account will help you to maximise the return on your money. Before switching to a high interest current account and using it to stash your excess cash, you also need to consider whether it is wise to keep your savings in an account that you use for your day to day spending. You need to consider just how likely you would be to spend the money if it is sat in your current account. If you are trying to save will having such ready access impede your saving plan?
Another factor is security. Although bank account security is generally quite robust, if someone were to get hold of your bank card, or an unscrupulous vendor started making fraudulent charges on your debit card, you could potentially lose your savings. Though, you should be able to reclaim the money from your bank in the event of fraudulent activity, you could still be without the balance until the matter is sorted. If you usually carry a positive balance or have savings up to the maximum allowed on a high interest current account and find that you will easily meet the necessary criteria then it is worth considering using a current account to hold some of your savings.
However, you need to be sure you could not get a better return elsewhere and be happy to manage your day to day finances in the same account as your savings, if this isn't the case then stick to a separate savings account. Many savings accounts now offer a number of features that were once solely available with a current account.
You need to consider if it makes sense to use a savings account for your day to day transactions. However, while some savings accounts now offer cash cards or debit cards, there are still certain features which are only available with a current account. Thus, before choosing the one, be sure which bank and savings account variant will suit the best to your requirements. When you choose a bank that fits perfectly with your banking requirements, make sure to explore all the benefits offered by the Paytm Payments Bank before proceeding further.
Check out the steps you need to take to open a Paytm Payments Bank savings account for easy, effortless and digital onboarding.
Is it possible to convert my savings account to my current account? No, it is not possible to convert a savings account to a current account as both types of account are different in terms of facilities, features and benefits. Savings accounts are opened for personal use and are meant for emergency use whereas current accounts are operated by businesses for regular transactions.
How much minimum balance is required for a savings account and current account? The minimum balance to maintain for savings accounts and current accounts varies from bank to bank. They usually offer a limitless number of daily transactions, but do not provide any earnings through interest, due to the deposit and withdrawal fluidity they offer.
In turn, this also means that they usually require a high minimum balance to be maintained, to avail the benefits of the account. Most MSME owners, businessmen and other entrepreneurs would concur that ICICI Bank is the best bank for a Current Account, offering a wide range of services, including the ease of opening an account online, in a matter of a few clicks, from the comfort of your home.
Gone are the days of standing in queues, filling up multiple forms and dealing with the delays in clearance of transactions, thereby causing loss in the form of cost of opportunities. As the name suggests, a Savings Account is for savings and accruing money. The minimum balance to be maintained is usually lower in these accounts. A typical Savings Account also offers an interest rate because the cash in your account is leveraged by banks to finance their investments and engage in lending activities.
They subsequently share a portion of the gains achieved with you, in the form of interest on capital, thereby increasing your accumulated wealth over time.
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