Differences Between Savings and Current Accounts

Have you ever wondered why bank officials ask what type of account you would like to open with their bank? In fact most times on the form for opening an account there is that box for you to indicate if you would want a current or savings account.

I am certain that most people go ahead to tick the savings option because that is what they are familiar with from bank advertisements. But it is important that you know the different types of accounts, their pros, and cons before making that decision.

Having a better knowledge would help you pick the right type of account that suits your needs or that of your business.

What is Saving’s Account?

A savings account is generally the most common type of deposit account in commercial banks. If you are one looking for interest on your money then a saving’s account is more appropriate.

This type of account is suitable for individuals, groups, and associations who want a place to keep their money with unlimited access to your cash at any point in time.

Requirements for a Saving’s Account in Ghana

Generally, there are certain documents you would need to open your savings account in Ghana.

They include:

• Proof of ID for each signatory (valid national ID such as passport, driver’s license, voters ID or national ID).
• Two passport size photographs.
• Proof of Address (Utility bill / direction to prospects home / call report).
• Bank account opening form.
• Initial minimum balance to be maintained at all times.

Why a Saving’s Account?

Well, there are a few reasons why a savings account would be a good fit for you, it can be a good option if:

You Have Excess to Money You do not Want to Keep at Home

Instead of letting your money just stay at home, you can put it in a savings account which would generate interest for you after a given period. Think of it as the bank pays you for keeping your money safe with them. However, the interest accrued to your account might be too small.

Direct Acess to your Money

Gone are the days where you have to queue at the bank for long hours before making a transaction. Nowadays, commercial banks have online platforms and applications which give you 24 hours access to your funds any day anytime.

It is a good choice if you would like an account for daily transactions without been subjected to transfer laws.

Open Accounts at little or no cost

Saving’s account’s cost little to nothing to open their accounts. all you need to do is walk into any of your desired bank’s branch closest to you to open an account.

Many commercial banks in Ghana eg Ecobank, GCB, ADB GTBank etc offer services in line with saving’s account’s

Setback’s of Saving’s Accounts

Although a good choice for individuals some of the challenges you might face with a savings account might be a limit on the number of withdrawal you can carry out daily.

You might also be required to have a minimum amount of money as your account balance at any given time.

What is a Current Account?

A Current account, on the other hand, is an account with a commercial bank, which can be used for frequent transactions. Most times people who use current accounts are businesses and organizations.

Opening a current account for your business gives you access to certain options such as overdrafts, no limit on withdrawals etc.

Requirements for a Current Account in Ghana

To open a current account with any commercial bank you would be required to:

• Means of identification (driver’s license, international passport)
• Two Passport photograph
• Proof of residential and postal addresses (a copy of any of the following):
  • Utility bill (water or electricity)
  • Tenancy agreement
  • Employer’s reference letter
• Bank account opening form.
• References (for a corporate account)
• Minimum opening balance (this varies from bank to bank)

Why a Current Account?

A current account is more appropriate for you and your business because :

You Separate Personal Account from Business Account’s

Having a separate account that takes care of your business is very important.

It helps you become more detailed, organized and also lets you know the financial well being of your company without mixing it up with your personal finance.

More Banking Option’s

Aside’s from the sense of professionalism you get from having a current account, it might also allow you to have access to certain banking option’s that a saving’s account might not have access to.

For example, you would have access to more loans and overdrafts from banks. Therefore we can say a current account can help with meeting your need for money in urgent situations.

Setback’s of Current Accounts

Some of the challenges that are associated with owning a current account are that services have additional costs and paperwork could sometimes be a little lengthy.

Which is appropriate for me?

The types of accounts to be opened would be determined by your reason for opening such an account. Each account type has been designed to meet certain needs of the consumer. therefore I would recommend that you visit your bank for further questioning so you can make better decisions.