Current account and savings account
Current account
A current account, also known for instance as a chequing or transactional account, is designed for handling personal daily finances. It is possible to have one's wages or other recurring payments, such as pensions or benefits, paid in a current account, and use the account to pay bills and invoices. A current account is also suited to the management of investment accounts and loans.
Various services may be connected to a current account, such as online and mobile banking services, direct debiting and bankcards to access the account. A current account can also be combined with a credit function, but this is always agreed on separately.
The interest paid on a current account varies by bank. The return on interest is affected by the interest rate itself and the interest calculation method: the interest is paid for example either daily on funds available on the account or on the basis of the lowest monthly balance. At the moment, interest paid on current accounts is very low.
The pricing of current accounts varies by bank. The account can generally be opened free of charge. A monthly fee may be charged on the use of the account, which then includes a specific service package. Alternatively, each service is priced separately.
Risks
Deposits made at a deposit bank involve a low risk. The depositor does not generally have a risk of losing the initial amount deposited in a deposit account. Finnish deposit banks are members of the Deposit Guarantee Fund which compensates for deposited funds to up to EUR 100,000 in case of a bank’s insolvency. Deposits at branches of foreign deposit banks operating in Finland are subject to the cover scheme offered in their home state, and the terms and conditions pertaining to such schemes should always be checked separately before making a deposit.
For further information on deposit guarantee, see the link on the right of the page.
Funds in a deposit account are exposed to inflation risk if inflation is higher than the interest paid on the deposit, and to exchange rate risk if the deposit is denominated in a foreign currency.
Accounts intended for saving and investment
Accounts intended for saving and investment purposes have not been designed for the management of personal daily finances and may be restricted by withdrawal limits. Such limits can refer either to the total amount withdrawn or the number of withdrawals over a certain period.
A savings or investment account can be either continuous or fixed-term. A continuous savings account is a good alternative when wanting to save for a certain purpose, for example for a new home, car or domestic appliance. You can, for instance, make a specific monthly deposit in the account. A fixed term account is a time deposit where funds are deposited for a fixed period of time. The funds may generally be withdrawn at the maturity date only, when the term is over.
The interest paid on savings and investment accounts varies according to the amount and lifetime of the deposit. Usually the interest rises if the amount of funds increases.
The bank may levy charges if withdrawals exceed the agreed amount.
Risks
Deposits made at a deposit bank involve low risk. The depositor does not generally face the risk of losing the initial amount deposited in a deposit account. Finnish deposit banks are members of the Deposit Guarantee Fund which compensates for deposited funds to up to EUR 100,000 in case of the bank’s insolvency. Deposits at branches of foreign deposit banks operating in Finland are subject to the cover scheme offered in their home country, and the terms and conditions pertaining to such schemes should always be checked separately before making a deposit.
For further information on deposit guarantee, see the link on the right of the page.
Funds in a deposit account are exposed to inflation risk if inflation is higher than the interest paid on the deposit, and to exchange rate risk if the deposit is denominated in a foreign currency.
6 February 2012