Can a Savings Account be Converted into a Current Account

Personal Finance

An eligible person can open an account with the bank. They can choose between a savings or a current account to keep their money with the bank. There are some fundamental differences between the two types of accounts. A savings account encourages the owner to save funds by using the formal banking channel to preserve their income. A current account, on the other hand, is mostly meant for business purposes. The requirements for KYC and supplemental documentation are different for the two. While it is more straightforward in the case of a savings account, a current account usually involves an in-depth process. Due to this fundamental difference, the Reserve Bank of India has laid down certain regulations in this regard. It is not possible to convert a savings account into a current account due to these. For any reason, if a customer wishes to make the transition, they can close their existing savings account and open another current account. 

What Is The Eligibility For A Current Account? 

A current account is a business account. Usually, only businesses are allowed to open a current account with the bank. The following points highlight the eligibility criteria for opening such an account. 

Individuals must be either of the following:

  • Resident individual 
  • Hindu Undivided Family (HUF)
  • Partnership Firm 
  • Sole proprietorship firm 
  • Private company 
  • Limited liability partnership
  • Trust
  • Association of persons 
  • Club or society 

If a customer is eligible to open a current account with a bank, there are many benefits that they can avail of. 

What Are The Benefits Of A Current Account? 

Since it is not possible to convert a savings account into a current account, a customer can opt to open a new current account. There are many benefits that they can enjoy by opening such an account. Here are a few of them. 

  1. A customer is likely to receive a premium banking experience. 
  2. Customers receive overdraft facilities. Due to this, they will never run out of funds. The bank considers your credit score to estimate the overdraft facility for a customer. 
  3. For one year, customers can avail of free ATM transactions. Afterwards, ATM transactions are charged with an annual fee. 
  4. Customers can avail of multi-city chequebooks along with a nomination facility. 
  5. A current account can be transferred to branches of other banks. Customers can also obtain monthly statements. 

So even though it is not possible to convert savings to a current account, one can always open a new account and avail of the above-mentioned benefits. Moreover, the procedure to open a current account is quite simple. Let us take a look at the steps involved in opening a current account. 

How To Open A Current Account? 

You can follow a few simple steps to open a current account with a bank of your choosing. Here are the steps involved. 

  • Visit the nearest branch of the bank. Request them to provide an account opening form. 
  • Fill out the form with all the correct details. Also, make sure to attach the relevant documents along with the form. 
  • To make your account more accessible and flexible for use, make sure that you opt for all facilities, including internet banking, mobile banking, SMS and more. 
  • Submit the application form along with the initial amount required to open the bank account. 
  • The bank will verify the details filled in by the customer. Once the process is complete, the account opening process will begin. 
  • The customer will receive the relevant account details via post. 

Since it is not possible to convert a savings account into a current account, a customer can open a new current account and close their savings account. It is no hassle to close a savings account. The customer will need to visit the bank branch in person and fill out an account closing form. The bank will verify all the details, after which the savings account will close. 

But what if someone does not want to close their savings account? Well, a savings account has some great benefits as well. 

What Are The Benefits Of A Savings Account? 

Even with a savings account, you can avail several benefits. 

  • Savings accounts are instruments of financial planning. They encourage savings and investments along with the organisation of finances. 
  • Customers can earn interest on the balance in a savings account. 
  • Customers can use their savings account to build an emergency fund. This keeps their money secure, earning a fixed rate of interest. The money can be withdrawn easily from the comfort of the customer. 
  • A savings account can be used to conduct offline as well as online transactions. Customers can also make cash withdrawals using their savings accounts. 


Both accounts carry their own set of benefits. So, a customer can fall into doubt about what to do. We have already seen that a customer cannot convert their savings account into a current account. They have to look for another way out. Customers can opt to maintain both accounts with a bank. This will ensure that their incomes and expenses remain different for both. From an accounting perspective, this can be very beneficial. A current account can help a customer get an accurate picture of their business operations. Another benefit of maintaining a current account is that a customer can write off their business expenses against their income. This can help save taxes for them. But the same would not be possible if the same expenses were incurred through a savings account. Thus, a customer must identify their banking needs. This will help them determine which account they must operate. For more such vital insights into the world of finances, visit Piramal Finance. It is a premier financial institution where you can get every update related to banks.