Does your savings account no longer fulfil all of your banking needs? Maybe you are tired of limitations on withdrawals and deposits or simply want the flexibility for more frequent, large-volume transactions. Perhaps you have even reached a point where you need access to an overdraft facility or business loans to manage your finances effectively.
If all these scenarios resonate with you, it makes sense to switch to a current account. Now, many might wonder if they can directly convert their savings accounts to current accounts. Let’s find out if this conversion is achievable and explore the different options available to you.
Is the conversion of a savings account to a current account possible?
The simple answer is no! You cannot convert a savings account into a current account. Despite both being fundamental banking products, their purposes, regulations, benefits, and restrictions differ significantly. This distinction means that converting one type directly into another is not feasible within the existing banking framework.
Top reasons why this conversion is not possible
| Savings accounts | Current accounts | |
| Purpose of the account | Designed for individuals, salaried employees, senior citizens, etc., to save money and earn interest. | Tailored for businesses, firms, traders, and professionals to manage a higher volume of transactions with ease. |
| Transaction limits | May have restrictions on the number of daily/monthly withdrawals allowed. | Allow unlimited transactions to meet the frequent and high-volume needs of businesses. |
| Interest earnings | Offer interest on the deposits, which encourages saving. Interest rates are typically nominal but serve as an incentive for account holders to save more. | No interest is provided. However, current accounts with an auto sweep feature allow idle balances to earn interest by automatically converting them into sweep fixed deposits. |
| Overdraft facilities | No overdraft facility is provided. | Often come with overdraft facilities that are crucial for businesses to manage cash flow during uneven income phases. |
| Minimum balance requirements | Low minimum balance required. In fact, you can open a zero-balance savings account to avoid the hassles of maintaining a specific balance. | Usually require higher minimum balances to support the larger transaction volumes and services designed for businesses. |
| Account opening documents needed | Extensive documentation such as business registration details, GST-related documents, and the business’s operational address could be requested. | These bank accounts simply require basic KYC documents like identity and address proofs (e.g., an Aadhaar card, PAN card, or passport). |
So, what are your options? Know the alternatives
Since direct conversion isn’t an option, the most convenient and advisable approach is to open a new current account online.
Choose a bank that offers the right set of current account features for your financial goals and spending patterns. You can consider factors like minimum balance requirements, transaction limits, fees or charges, online banking facilities, interest-earning opportunities through an auto sweep-out facility, and any other services that hold value to you.
Next, apply for a current account online by following these steps:
- Visit your bank’s official website.
- Download the current account application form.
- Complete the form with relevant details.
- Upload the necessary current account opening documents and click on ‘Submit’.
- Once verification is done, your account will be opened.
Keep in mind that most banks need an initial deposit to activate your current account. This deposit amount varies depending on your bank and the type of current account you choose.
To sum up
As you can see, converting a savings account into a current account is not possible due to the differences in their purposes, functionalities, target users, limitations, and regulatory structures. The most practical approach is to open a new current account online with a bank that offers the right combination of features and services.
So, don’t wait to improve your finances anymore. Open a current account and enjoy benefits such as unlimited transactions, high cash deposit limits, overdraft facilities, customised solutions, and easy access to business loans.
