What’s the difference between a current account and a savings account?
Current accounts and savings accounts are both types of bank account, but you use them for different things. To put it simply, savings accounts are for saving (big surprise!) and current accounts are for spending.
But the differences go beyond that, and you should be familiar with how they work to make sure you’re picking the best one for your money.
So let’s break down these accounts in a little more detail. We’ll also look at how Monzo's current account and Savings Pots compare, so you can see how they work together to make managing your money easier.
What’s a current account?
A current account (also known as a personal account) is designed for your day-to-day money management. It's where your salary lands, where you pay your bills from, and what you'll use for daily spending. Think of it as your financial home base – the account that keeps your money moving.
With a current account, you'll normally get a debit card you can use in shops and online, the ability to set up direct debits and standing orders for regular payments, and access to an overdraft if you need to borrow money short-term. Most modern current accounts come with mobile banking apps (like Monzo!), making it easy to check your balance, move money around, and stay on top of your spending wherever you are.
What’s a savings account?
A savings account is a bit different. Instead of being for your everyday transactions, they’re designed to hold money you're putting aside for the future. The main feature of a savings account is that it pays interest on the balance you hold, helping your money grow over time. And while it’s true that some current accounts also pay interest, the rates on dedicated savings accounts are typically higher.
You might use a savings account to build towards longer-term goals, like saving for a house deposit, a holiday, or just to have an emergency fund. You won't usually get a debit card with a savings account, and there might be limits on how many times you can withdraw your money.
Depending on the bank, you might not be able to sign up for a savings account directly. Instead, you’ll need a current account first. And some banks might offer different rates depending on how long you’ve had that current account and how you’re using it.
How Monzo’s current and savings accounts compare
At Monzo, we've designed our current account and Savings Pots to work beautifully together, giving you the best of both worlds in one app.
Our current account gives you everything you'd expect – a Hot Coral debit card, instant spending notifications, and tools to help you budget and track where your money goes. You can spend abroad without fees, split bills with friends using Monzo Split, and get your salary one business day early if you’re paid via BACs (Ts&Cs apply).
But here's where it gets interesting. In your Monzo current account, you can open Savings Pots that work just like savings accounts. These Instant Access Savings accounts earn you interest and you can access your money when you need it.
You can create multiple Savings Pots for different goals – one for a holiday, one for a house deposit, one for your emergency fund – and watch them all grow together. And extra features like automated roundups (rounding up your spending to the nearest pound and saving the difference) make it effortless to build your savings without thinking about it.
Ready to see how Monzo can work for you? Apply for a Monzo current account to find helpful ways to manage your money.
To sign up for a Monzo current account, you need to be over 16 and a UK resident. Ts&Cs apply.
Questions? Answers.
Do current or savings accounts have better interest?
Savings accounts generally offer better interest rates than current accounts. In fact, most current accounts don't pay interest at all, while savings accounts are specifically designed to help your money grow through higher interest rates. However, some current accounts do offer competitive interest rates on limited balances.
Should I get a savings or current account?
It depends on your situation, but you’ll likely need both at some point. A current account is essential for managing your day-to-day money – receiving your salary, paying bills, and making everyday purchases. A savings account is important for setting money aside and earning interest on funds you don't need immediate access to. With Monzo, you get a current account for your everyday spending and can open Savings Pots for your savings goals, all in one app.
Can I have multiple current and savings accounts?
Yes, you can have multiple current accounts and savings accounts, and many people do. You might have one current account for your main finances and another for specific purposes like business expenses or household bills. Likewise, you could have multiple savings accounts for different goals. With Monzo, you can open up to 20 different Savings Pots in your current account, each with its own goal and interest, making it easy to organise your money without juggling multiple bank accounts.