Is it possible to have a current account without a savings account? If it is possible, then if the client withdrew more than of its balance, how will the overdraft occurs?

  • 2
    Country, please. Might be different for different jurisdictions. – DumbCoder Sep 8 '14 at 8:55

I'll assume you are in the UK, where 'current account' is the normal term for what is called a 'checking account' in North America. By that I mean an account where you do your day-to-day banking and which allows you to write cheques, withdraw cash with a bank card, set up automatic payments etc.

Not only is it possible, it's absolutely normal. A current account is usually the first thing you set up with a financial institution. In fact many institutions won't let you set up a savings account without a current account. The only case where you might be forced to create a savings account to get a current account is with a Building Society (Credit Union to North Americans).

Overdrafts are generally unrelated to savings accounts. If you take out more than is in your current account, you owe the bank money. The bank will not normally transfer funds from a savings account to 'top up' a current account (though it can sometimes be arranged).

| improve this answer | |
  • "The bank will not normally transfer funds from a savings account to 'top up' a current account": Actually, in the US this is a feature offered by many banks, if not all. If your checking account balance goes negative, they will transfer funds from your savings account (assuming you have one). Some banks will charge a fee for doing this, but it is less than the fee for an overdraft. – Nate Eldredge Sep 11 '14 at 15:15

I'm not sure what you mean by a "current account"? Checking?

If so, the answer is that if you don't have an overdraft fallback set up -- which may either be drawing from the savings account or drawing from a personal line of credit -- the check bounces. (Which usually means your bank charges you a fee AND the vendor charges you an additional fee...)

| improve this answer | |
  • I'd ditto the question about what the OP means by "current account", but assuming he means checking account ... My bank has "overdraft protection" where if I overdraw my checking, they will automatically loan me money. There's a limit and the interest rate is very high, but I suppose it's better than bouncing a check. – Jay Sep 8 '14 at 4:06
  • Varies by bank. My credit union will let me decide whether to hit the loan or the savings account first; I have it set for the latter. And these days it's so easy to move money between accounts that it's been decades since my last overdraft. (And that was deliberate -- they weren't charging no matter how many overdrafts went to the savings account, so the right thing to do was keep the checking account empty and effectively write checks from savings. Alas, they fixed that.) – keshlam Sep 8 '14 at 4:18
  • Absolutely. I suppose my answer was a little clumsily worded. I meant to say that different banks have different policies and programs, and this was one example. Yes, elsewhere I've had accounts where they would automatically draw from my savings. My intent was to say that you'd have to check with your bank. – Jay Sep 8 '14 at 4:31

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.