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What is the Difference Between a Current Account and a Savings Account?

Over the years I've never fully understood what the girl meant when she asked me if my account was a "current account". I remember thinking, "well if I'm currently using it then I guess it's my current account", but I was never rude enough to say that. I never used to have a savings account, because I lived by the day and never had any savings to keep in it.

Since I've settled down and got a steady job I've began to wonder the differences between a current account and a savings account, and what a savings account had to offer me. Let's start with the basic differences - a savings account gives you a better rate of interest for your savings and a current account gives you more services to use with your account. A current does accumulate interest, but at a fraction of the interest that a savings account does, plus the money doesn't sit about long enough in a current account to accumulate much interest. If you would like to save a bit of money every month to keep for a rainy day then a savings account is the way to go. You won't have easy access to your money like a current account, so it's not so easy to spend, and it will gain good interest, and so grow for you for the future.

The main drawback of a savings account is the benefit I just mentioned: with a savings account you don't have ease of access to your money that you would have with your current account. By this I mean you may not get a bank card for your savings account, so you cant withdraw money at a bank machine; or you may have to give like 3 or 5 days notice to withdraw money from your savings account.

I have a Barclays' current account for my wages to be paid in to, but with bills, paying off debts such as credit cards, and the general cost of living there was never any surplus money there for me to call "savings". Now that I have paid off most of my debts and can start to see a bit of light at the end of the tunnel I have began to thought about doing a bit of saving for the future.

For more information on current accounts and savings accounts you can visit Moneynet's bank account comparison page and find out what different types of accounts, from different banks and institutions, have to offer you.

Disclaimer:
All information contained in this article, is for general information purposes only and should not be construed as advice under the Financial Services Act 1986.
You are strongly advised to take appropriate professional and legal advice before entering into any binding contracts.

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