WHAT IS A SALARY ACCOUNT?
A salary account is a specialized savings account for employed individuals, streamlining deposits of their monthly income. It offers convenience to both employer and employee with exclusive perks and also gives access to advanced mobile and net banking, which enhances the banking experience.
WHO CAN HAVE A SALARY ACCOUNT?
Employers collaborate with banks to establish salary accounts for employees. These accounts receive direct deposits of monthly salaries. If employees lack an account in the partnered bank, employers guide them in opening one. Therefore, salary accounts are accessible to anyone based on organization-bank partnerships.
FEATURES & BENEFITS
- Enhanced Benefits: Compared to savings accounts, salary accounts provide more perks.
- Profitable to Banks: Fixed monthly deposits make it a stable source of CASA.
- Bank-Dependent Benefits: Benefits vary across different banks.
- Favorable Terms: Zero minimum balance, free passbook/cheque book/e-statements, and a debit card.
- Advanced Services: Access to seamless phone banking, net banking, and online fund transfers.
- Expanded Services: Demat accounts, loan convenience, and credit card privileges.
- Utility Payments: Convenience of paying utility bills.
SALARY ACCOUNT VS SAVINGS ACCOUNT
| SALARY ACCOUNT | SAVINGS ACCOUNT |
| Only an employer can open it. |
It is accessible to any eligible individual.
|
| These accounts maintain a zero-balance requirement. |
A minimum balance must be maintained monthly/quarterly.
(Though many banks now offer a zero-balance savings account.) |
| Account holders receive additional advantages. |
Benefits typically come with associated charges.
|
| Main purpose – credit of monthly salary. |
Main purpose – encourage savings.
|
ACCOUNT CONVERSION PROCESS
If the salary remains uncredited into the designated salary account for three consecutive months, the system will automatically change it to a standard savings account. Consequently, all the privileges and features associated with the original account will be transformed to align with those of a regular savings account.
On the other hand, if an individual starts working for an organization while already maintaining a savings account with the associated bank, the organization will initiate a request for the conversion of the existing savings account into a salary account.
CONSIDER READING-
