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What’s the difference between a current account and savings account?

What’s the difference between a current account and savings account?

By: Anne East | 22nd May 2020

A current account is best for everyday banking – like getting money out from the hole in the wall or paying bills. On the other hand, a savings account is best for… well… savings.

As banks vie for our business, the lines between the two types of account are sometimes blurred, so it’s not always immediately obvious which one is the one you need.

To help you weigh up the pros and cons, here’s a whistle-stop tour of current and savings accounts.

Main features of a current account

Current accounts are ‘transactional’. In other words, they’re designed to be used on a regular basis – money goes in, money goes out. Banks and building societies offer all sorts of current accounts, so while they’re fundamentally the same, each one will have its own nuances.

Generally, you can expect a current account to give you:

Main features of a savings account

When it comes to savings accounts, the clue is in the name – it’s an account that you put money in with the intention of leaving it there.

But, to make it more complicated, a ‘savings account’ isn’t just one type of account. The name is more of an umbrella term that covers a range of different products; for an in-depth look at what these are, see our guide to savings accounts.

However, savings accounts do share similar features, including:

Which type of account do I need?

Current and savings accounts are inherently different beasts, although some savings accounts superficially mimic current accounts and offer debit cards as well as unlimited withdrawals.

With that in mind, there’s nothing stopping you from using a savings account as a current account, but bear in mind that convenience usually comes with a catch. And the more accessible a savings account is, the less you’ll earn in interest.

So how do I choose?

Ultimately your decision comes down to how you use your money and whether you have savings – that is, to your expectations about the amount of interest that’s paid.

In reality, many people have both types of account, to fulfil two different functions:

If you use online banking, then you should stay on top of any admin for managing both accounts.

Plus, in most cases, if you hold a current and a savings account with the same bank, you’ll be able to link them. Linking accounts not only makes budgeting much easier, it means access to all your money will be at your fingertips. (Just don’t spend it all at once.)


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