The CASA Full Form in Banking is Current Account Saving Account.
Having a CASA account means you can save money from your current account. This is a special perk offered by several banks to retain their customers’ money in such institutions. It’s like having a savings account and a checking account in one convenient place.
If you have a current account, you will earn next to nothing in interest, but your savings will earn a respectable rate of return. Popularity of CASA is highest in the Western world and Southeast Asia.
Customers can use their CASA account for their day-to-day banking needs because it is not a term deposit account.
How it works?
The money in a CASA account is accessible at any time, combining the best features of a checking and savings account. It has a lower rate of interest than a deposit account since it offers customers more freedom of choice.
For banks, CASA is a more cost-effective means of raising capital than providing term deposits, which typically give greater rates of return to depositors. Banks and other financial organizations promote CASA use since it increases their bottom line.
The CASA Ratio measures the proportion of a bank’s deposits that are held in checking and savings accounts as opposed to the bank’s total deposits.