When it comes to financial planning, many often look towards investment instruments that give more significant returns. However, these money market instruments usually carry a significant amount of risk if you do not have sufficient experience in investing. However, financial planning does not only involve investing. It also means managing your money the right way. This involves using a savings and current account the right way. So, let us take a deep dive into how these two types of accounts can help you better plan your finances for the future.

These accounts are the go-to choice for most people with a bank account. They are safe and can be a great financial management and planning tool. You can easily keep your excess funds stored in this account. More importantly, most banks offer a certain amount of interest on this account balance credited back into your account. 

Another benefit of such an account is that the balance is readily available whenever needed. Fixed and recurring deposits are also available for those who wish to earn more interest on their savings in their .

However, a fixed or recurring deposit may limit cash flow in your account. To have funds readily available, you can keep saving in this account and use the funds whenever needed. This grants you more liquidity that can be beneficial in your financial planning.

Unlike a , a current account is usually beneficial for businesses, self-employed professionals, and even salaried professionals who need to make frequent transactions through their account. 

One of the biggest differences between a savings and a current account is that the latter does not offer any interest on the account balance. While a current account enables high-volume transactions, it is not a very good tool to build savings. Nevertheless, it can be a significant tool in financial planning.

When you , you can enjoy several benefits. These include withdrawing money from an ATM without worrying about daily withdrawal limits. It also means that you can use the overdraft feature. This lets you withdraw more money than what is available in your account. All of these benefits make a current account an integral part of financial planning. 

Having understood the benefits and drawbacks of both types of accounts, you need to use them efficiently to better manage your fund liquidity and monthly budget. 

A good financial plan means having both liquidity and some funds tied up in investments. A good way to do this is to keep some funds in your current account (more liquidity) and some more in your (for investment purposes). 

This is because your current account allows unlimited transactions, which can be helpful for your day-to-day transactions. On the other hand, a has daily withdrawal and transaction limits. As a result, you can use this account to pour money into your investments when needed. You can even withdraw money from your investment earnings and have it available in your. Some of these funds can even be transferred into your current account to meet your day-to-day transaction requirements. 

Besides having more liquidity and adhering to a budget, financial planning with savings and current accounts can help you keep your personal and business finances separate. 

This is a crucial part of financial planning if you are self-employed or an entrepreneur. The funds in your savings bank account can be used for personal expenditures. The funds in your current account can be used for business expenditures. This distinction in your finances can also help you track both personal and business spending more accurately. 

In conclusion, once you , you can have a digital trail of all transactions conducted for business purposes. This can even be helpful when filing taxes or conducting a financial audit of your business expenditures. At the same time, a savings account can help you build wealth over time.

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