Saving account vs current account

PR Manager

May 15, 2023
6 min

What is the difference between a savings and a current account? Does every bank have these types of accounts? And what about neobanks? Let’s figure it out!

To begin with… 

The decision of which account is more convenient for us cannot be taken lightly. Therefore, in order for you to understand in greater detail the options currently available in the financial market, we must start with the classic question: current account vs. savings account?

Let's start with the meaning of savings account. Surely most of us, at some point in our lives, have visited a bank branch to open an account in order to save our money, receive our salary, among other things. In fact, for many of us, at that time, it was the only alternative, so we did not give much importance to what conditions were offered for various different types of accounts in a bank. If this was your case, you most likely opened a savings account. Basically, the purpose of this type of account is precisely to keep the money safe, while generating some kind of interest for the client, but restricting its use by the client himself, for example by completely freezing the initial deposit for months, even a year.

In other words, a savings account is an account where the user does not just keep money, but hands it over to the bank for safekeeping with limited rights to use these funds under an agreement with the bank, for which he receives his interest in the future. If a person withdraws cash from an ATM and has a savings account instead of a current account, and in his agreement with the bank there are strict conditions regarding the use of funds, for such transactions, the bank may charge a fee or even deny benefits, such as interest on the account, for breach of contract.

In this sense, businessmen have been a little more selective, because for them the decision has always been more serious. To better understand entrepreneurs, it is necessary to know the meaning of a current account. Because of the characteristics already mentioned above, a savings account is not the appropriate option specifically for their business. As such, for a long time the most optimal option for corporate clients has been the current account, which allows to perform multiple operations on a daily basis, for example to pay suppliers, employees, services, among other things directly related to the activity of a company. A current account provides this possibility, but it does not give the client interest, on the contrary, it may generate additional costs, which are considerably high in traditional banks.

Blackcatcard account: the right balance between savings, earning and use of money with no absurd limits

Once we have described, in general terms, the difference between savings and current accounts, we can move on to the next point. Undoubtedly, financial technologies have arrived to break this paradigm. At Blackcatcard, being one of the most innovative neobanks in the sector and understanding the needs of both individual and corporate clients, we set ourselves the goal of changing that outdated scheme of " limits / high costs", imposed by the traditional banking system.

First of all, our individual users can open a current account completely free of charge and without maintenance fees. On the other hand, our corporate clients can also open a current account with us for a very competitive price, since we optimized all our processes and eliminated unnecessary ones that may generate additional costs. In this way all our users can deposit their money in a reliable account, with a security level comparable to that of a bank, and save or spend their money as they wish. In fact, with the Blackcatcard account our clients can not only store money on it, but also have access to multiple benefits. Within the framework of the loyalty program offered by our partner Baltic Technology Solutions OÜ, they receive a reward of up to 4% per annum on the account balance*, generating a significant passive income that is paid out on a monthly basis, so our product resembles a savings account as we traditionally know it, but with some significant advantages outlined in this article.

From a more objective point of view, a person's resources, are their own. One of the reasons why banks give interest to their individual depositors for the money in their savings accounts is because, quite possibly, these banks reinvest that money (in credit disbursement, purchase of shares, etc.), generating the highest profit for themselves, leaving a very low percentage to the depositors. Therefore, they need to freeze those client funds, because, in practice, that money is not in their accounts. Actually, if the bank makes a bad investment, it puts the depositors' assets at risk. In the event of a bank collapse, the client's funds are not reliably protected. If that happens, for example, in the EU territory, a traditional bank is only legally required to pay out to depositors up to 100,000 Euros. If these clients had an amount greater than 100,000 Euros in their accounts, they may not receive the rest of the money back.

With this in mind, at Blackcatcard we understood that a good financial service must be fair and transparent from start to finish. Therefore, and in accordance with EU regulations, we do not use our clients' money under any circumstances, only they can manage their assets as and when they wish. In case of force majeure, the client always knows that he will get his money back in full.

To that end, our users can deposit or receive funds without any limit and totally free of charge. If individual customers want to send money, they can make up to 5 outgoing SEPA transfers for free, and only after the sixth one they pay a small commission of 0.20 Euros, while corporate clients enjoy the most competitive rates for all transactions required by their business.

Additionally , we provide our users with a virtual and a plastic card with which they can make purchases of their choice, for which they can also receive a very attractive cashback from our partner Baltic Technology Solutions OÜ. Of course, with their Blackcatcard, they can withdraw money from virtually any ATM in the EU and from most ATMs worldwide! In this case individual clients can withdraw up to 200 Euros per month without commission, after exceeding that amount a small fee of 1% of the withdrawal amount will be charged.

This way we give our users total control over their funds, as they have access to them and can use them in multiple ways, without limits that can really restrict them from managing their money. In fact, depositing, saving and using money with a Blackcatcard account can yield very interesting rewards!

Our online and mobile banking is designed to make it easy for everyone to access our financial products and enhance their user experience. The new generations, who are more tech-savvy, will probably never have to go to a bank branch. For our part, we will continue to innovate to offer products that meet all our clients' needs and expand our offering so that more and more people have access to the best quality online banking possible.

*An integrated crypto exchange and custodial crypto wallets are provided by our partner Manerio UAB. You can find more information here.
**The bonus payment is a part of the loyalty program provided by Baltic Technology Solutions OÜ. Detailed terms and conditions can be found here.


What is the advantage of a current account over a savings account?

A current account allows you to make many transactions a day. They are usually the accounts that entrepreneurs open for their businesses.

What are the disadvantages of a savings account?

A savings account restricts the use of the money by the depositor.

Are savings accounts better?

This depends on the needs of the depositor. If he needs to constantly access his saved money and use it to pay for goods and/or services, then it may not be the right option for him.

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