Current vs Savings Account: What Should a Freelancer Choose?

Current vs Savings Account: What Should a Freelancer Choose?
Rohit17 February 2024

Deciding between a current vs. savings account may appear straightforward, but it's a crucial decision for freelancers

Each has advantages and limitations, but understanding which aligns best with your freelancing needs can significantly impact your financial success. 

Let's delve into the difference between a savings account and a current account to help you make an informed choice.

Difference Between Savings Account and Current Account

The default choice often leans towards a savings account, which offers a secure avenue for saving and earning interest. 

However, as your business evolves and transaction volumes increase, you'll likely need a current account, which is typically designed for businesses.

Here’s the core difference between a current account and a savings account.

AspectSavings AccountCurrent Account
FunctionalityPrimarily for saving money with interest earningsDesigned for frequent transactions and businesses
Transaction LimitsLimited withdrawals and transfersUnlimited transactions, often with a fee per transaction
DocumentationTypically used for personal financesProvides clear records of business transactions
Growth OpportunitiesLimited for business growthNecessary for business loans and expansion
International UseOften restricted for international transactionsEssential for handling foreign income

Here’s Why Savings Accounts Might Not be Ideal for Freelancers

Here’s Why Savings Accounts Might Not be Ideal for Freelancers
  • Ease of Personal Finance Management
    While savings accounts excel in personal finance management, they lack the robustness required for business finances. Freelancers may find it challenging to keep track of business transactions separately.  
  • Difficulty in Separation
    Imagine a freelance writer accidentally using their savings account for personal online shopping and business-related software purchases. Mixing these transactions makes it challenging to distinguish between personal and business expenses, especially during tax season or when assessing business performance.   
  • Lack of Documentation
    Savings accounts do not provide sufficient documentation to justify income and support business growth. This could pose challenges when applying for loans or seeking business expansion opportunities.
  • Limitations with International Transactions
    For freelancers dealing with international clients, savings accounts often fail to facilitate seamless international transactions, leading to delays and potential income loss.
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Advantages of Current Accounts for Freelancers

Here are five key reasons why having a current account is essential.

Advantages of Current Accounts for Freelancers
  • Clear Separation of Finances
    Current accounts clearly distinguish between personal and business finances, simplifying financial management and ensuring accurate reporting.  
  • Facilitates Business Growth
    Access to current accounts is vital for obtaining business loans, and credit cards, and planning future expansion strategies, providing a solid foundation for business growth.
  • International Transactions
    Current accounts streamline international transactions, allowing you to receive and manage foreign income seamlessly, eliminating currency exchange hassles and reducing transaction costs.
  • Professional Touch
    A current account helps build credibility with clients. According to CA Rohit Khurana, Finance Head at Skydo, having a current account boosts professionalism, as clients can make payments to a dedicated business account, presenting a more professional image.

Considerations for Freelancers Without Expansion Plans

If you're a freelancer without immediate expansion plans or the need for business credit, a savings account might suffice. 

However, it's essential to evaluate your individual needs and long-term goals to ensure your chosen account aligns with your financial aspirations.


Choosing between a Current vs. Savings Account is a significant decision for freelancers, impacting financial organization, growth opportunities, and international transactions. 

By understanding the difference between a current account and a savings account and assessing your specific requirements, you can make an informed choice tailored to your freelance business.

Remember, the right account choice is crucial for your financial success. For further support and resources tailored to freelancers, consider joining our community


Q1. Can I use a current account for personal use?

Ans: It is advisable to steer clear of using a current account for personal purposes to avoid bookkeeping issues.

Q2. Who is eligible for a current account?

Ans: You are eligible to open a current account if you fall under any of the following categories:

  • Resident Individual
  • Hindu Undivided Family
  • Sole Proprietorship Firms
  • Partnership Firms
  • Limited Liability Partnership Firms
  • Private and Public Limited Companies

Q3. How much money is required to open a current account?

Ans: The minimum balance requirement for a normal current account is Rs. 10000. It's advisable to check with your preferred banking institution for specific requirements.

Q4. Which bank is best for a current account?

Ans: The best bank for a current account depends on your specific needs, including transaction volume, international transactions, fees, and additional services required. Conducting thorough research and comparing offerings can help you find the most suitable option.

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“Love being part of an exciting and challenging journey.”Netflix & Chess