6 MinsJan 3, 2022
In this digital age of cashless transactions, holding a bank account is integral to your financial needs - be it for your personal savings or your business purposes. A bank account makes money work for you, facilitates hassle-free transactions
almost 24x7, and keeps your hard-earned money secured.
Broadly, there are two types of bank accounts: 1) Current Accounts and 2) Savings Accounts. The Savings Account is designed to meet the banking needs of people from all walks of life. Whereas the Current Account is designed for the need of organisations
across different sectors. For you to make an apt choice, let’s understand both these accounts in detail.
A Savings Account helps you to park your monthly savings. The money parked in this account earns you interest at
the rate of around 3.0%-3.5% per annum. It ensures that your hard-earned money is not lying idle, and it works for you. The payout of the interest on your Savings Account happens every quarter.
Section 80TTA of the Income Tax Act, 1961
allows a deduction of up to Rs 10,000 on the interest income earned on the Savings Account, thus helping you to reduce your tax outgo. This deduction is available to Individuals and Hindu Undivided Families (HUFs).
Need for Savings Account
It is useful for saving money from your monthly earnings, making productive investments, parking funds for emergency needs, paying bills and addressing your liquidity needs.
- Make investments: It can be used to make investments in mutual funds, fixed deposits/recurring deposits, etc. In other words, the Savings Account could serve as a primary account for your investment activity.
- Pay bills: Besides, you could pay your utility bills, do your travel, hotel, and movie ticket bookings, transfer money, etc. by using the net banking facility, or swiping the ATM-cum-debit card at the point of sales, or
issuing a cheque.
- Cash withdrawal: And if you wish to withdraw cash to transact, it is possible to do so using the ATM-cum-debit card.
Types of Savings Accounts
Axis Bank offers a variety of Savings Accounts, with frills and no-frills, catering to your needs and financial habits as a customer. A range of options exists viz. Regular Savings Account,
Small Basic Savings Account with zero balance facility, Salary Account, Senior Citizen Savings Account,
Future Stars Savings Account for children, and many more, each with distinguishing features and benefits. For example, the Senior Privilege Savings Account designed
for senior citizens offers discounts /additional benefits on healthcare services, while those with an Easy Access Digital Savings Account can
enjoy offers and benefits across e-commerce portals. So, make sure you opt for a Savings Account that suits your needs.
Current Account is most suited for regular transactions (in terms of cheque issuance, deposits, withdrawals, and D.D. issuance etc.); and there is no limit on
the number of transactions you can perform.
Need for Current Account
If you are a professional or have your own business, a Current Account is useful as it would add to your reputation, highlight your professionalism, and your investors, customers/clients
would take you seriously. Moreover, you would have a clear picture of your business or professional transactions and segregate them from the personal ones (with a Savings Account). It offers the following benefits:
- Ease of transactions: To run your business or carry on with your profession in a smooth and organised manner, you have access to online NEFT/RTGS transactions 24x7, prompt SMS alerts, e-mail alerts and more. Besides,
there is no limit on the issuance of free chequebooks and cash withdrawals (unlike a Savings Account).
- Value-added services: Some banks, like Axis Bank, also offer allied services such as CMS, Trade & Forex Services across the internet and mobile banking platforms, thus enabling you to transact in a hassle-free and seamless
- Access to additional funds: To help you manage your working capital requirements, you get access to the overdraft facility (on request) if you fall short of cash.
Types of Current Accounts
There is a varied range catering to businesses and professions. For example, the Normal Current Account with Axis Bank has
a monthly cash deposit limit of Rs 2 lakh, whereas for the Current Account–Advantage, Current Account—Classic,
and Current Account—Privilege this limit is Rs 3 lakh, Rs 12 lakh and Rs 60 lakh, respectively.
You can also open the Full Power Digital Current Account using Video-KYC in four easy steps and avail of over 250 banking services. It offers features such as contactless account opening, zero document upload, no service charges, and benefits
such as 1% cashback on E-debit card and up to 50% cashback through Grabdeals.
Axis Bank offers a variety of Current Accounts for individuals, HUFs, sole proprietorship concerns, partnership firms, companies, trusts, Government bodies, across scales of operations and sectors. To explore the different types of Current Accounts
offered by Axis Bank, click here.
The minimum average balance to be maintained in a Current Account is higher (starting Rs 10,000 for the standard Current Account) and depends on the nature of your business or profession. For Trusts, there isn’t a minimum balance requirement.
Note that you do not earn any interest on the balance held in the Current Account simply because of the fluid nature of the account i.e. frequent transactions.
Whichever choice of account you make, ensure you are assessing your requirement well and then finally keep all your KYC documents handy, photographs, fill in the account opening form providing all the necessary details, and the initial amount as required
to open the respective account. Except in case of Digital Current account where you need only Aadhaar Card number and PAN Card.
Disclaimer: This article has been authored by PersonalFN, a Mumbai based Financial Planning and Mutual Fund research firm. Axis Bank doesn't influence any views of the author in any way. Axis Bank & PersonalFN shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision