At whatever point when we go for opening a bank account, one thing strikes to our mind that is which account is most appropriate for us either it is saving account, a current account or Demat account. Individuals usually go for any one account; however they are still confounded between these two accounts. Here is the article which explains the differences between these three types of accounts and help to understand these contrasts.

Saving account

Saving account can be defined as account kept up by retail financial organizations which pays premium however can’t utilize their money directly as cash or by giving a cheque. These records let clients put aside a bit of their liquid assets while getting any monetary return. This account is the most widely recognized sort of deposit account. An account open in commercial bank, for empowering reserve funds and investment is called as a Saving Bank Account. Saving account gives a variety of facilities such as ATM cum Debit Card facility with distinctive variations, figuring of interest regularly, internet banking, online cash exchange, mobile banking and so forth.

Current Account

An account kept up with commercial bank, for providing support to transact money frequently is called as Current Account. Many facilities are given to you, when you open a current account such as direct debits, internet banking, overdraft facility, transfers and so on. In current account, any amount can be withdrawn or deposited whenever you want and without giving any notification. It is additionally suitable for giving payments to lenders by giving cheques. This kind of account satisfies the many needs of an association that requires regular cash transfer in their daily activities. This sort of account can be opened by an Individual, Company, firm and so forth. The current account is also called as “Demand deposit account” or “transactional account.”

Demat account

Demat account is used to hold financial securities, like shares and equity, in electronic form. It is an abbreviation for Dematerialised account. The bank acts as a depository participant or as an intermediary between investor and the depository.

Saving Account vs. Current Account vs. Demat Account

Here are some contrasts that exists in these types of accounts:

Meaning

Saving account is a deposit account in bank that energizes saving of an individual.

Current account is a deposit account in bank that which helps individual in frequent money transaction related with a business.

DEMAT account helps the depository to hold financial securities in electronic form.The depository is offered a Demat account number that can be quoted to enable electronic settlement of trades to take place.

Best for

Saving account is best for individuals or we can say for salaried individual.

Current account is best for companies or business men.

Demat account is best for individuals who have invested in shares, equities and debentures.

Purpose

The main purpose of saving account is to encourage the people to save from their salaries.

The main purpose of current account is to help the individual where more than one transaction is required.

The main purpose of demat account is to keep a fair record of all electronic transactions related to the stock market. It eliminates the role of offline transit of stock market data.

Interest

In saving account, interest is given on deposited amount.

In current account, no interest is given on deposited amount.

Minimal amount

To open a saving account, small amount of money is required.

To open a current account, high amount of money is required as compared to amount required to open saving account.

Overdraft

In saving account, no facility of overdraft is available for individuals.

In current account, facility of overdraft is available.

Withdrawals

In saving account, limited withdrawals are available.

In current account, unlimited withdrawals are available.

Pass book

In saving account, pass book is issued to individuals.

In current account, pass book is not issued to businessman or companies.

In demat account, passbook is issued to the demat account holder.

Disadvantages

Disadvantages of saving account is maintenance of minimum balance requirements, lower interest rates than other account. There is federal limit on saving withdrawal.

In case of current account, there is an opportunity cost of losing on the interest rates due to low or zero interest on money in current account. There is an attached operational burden.

Trading in securities may become uncontrolled in dematerialised securities. Also, the role of key market players need to be supervised as they have the capability of manipulating the market.

Conclusion

From the above article we come to know that saving account is used to encourage the savers of country whereas current account is used by businessman or companies to make many transactions. Interest rate is usually charge on saving account but not on current account. Facility of overdraft is only available for current account holders. Saving account can be open with small amount while current account can be open with higher amount. Current account holders are allowed to make unlimited withdrawals whereas holders of saving account can make limited withdrawals. Pass book is only issued to saving account holders. Demat account is used to hold shares and securities in electronic form. Its purpose is to hold the shares that have been bought and dematerialised.