A salary account is a type of savings account opened by your employers in which you receive your monthly salary. Salary accounts come with zero minimum balance and certain features and benefits like free ATM withdrawals. The best benefit of a salary account is that you are guaranteed a timely and seamless salary payment and a smooth transaction facility. So, you can easily use your salary for your daily expenses when you get your salary deposited in this account.
Linked with your PAN card, a salary account can be turned into a savings account once they stop receiving salary in it for a specified period.
How Does a Salary Account Work?
A salary account typically offers features and benefits geared towards those with a regular income, such as direct deposit and automatic bill payment. It has a simple working process.
First, open a salary account with a bank of your choice. This will usually be a bank that has a tie-up with your employer
Then, your employer will start crediting your salary into this account every month
You’ll have access to use funds from this account with a debit card or net banking for paying bills, transferring funds, and other financial transactions
Salary Account Benefits
A salary account has the following benefits:
Zero Balance: A good salary account minimum balance should be availed at as much lower value as possible. The limit of the minimum balance requirement is set to zero by most of the banks. In this, the employees are not forced to fulfill a specific amount limit in the accounts throughout the month. Even if the salary account exhausts or reaches below the limit, the employees don’t have to pay the penalty or extra money to maintain the account.
Salary account interest rate: The interest rates for salary accounts by banks are usually the same as the savings account interest rate they provide to all the customers. Do check if they offer a better savings account interest rate for your employees.
Accessibility To Loans: If your employer has a tie-up with the bank, you can get easier access to loans at reduced rates of interest. The professionals are offered competitive interest rates and faster documentation loans. The bank gives the account holders car loans, home loans or personal loans, or any other service they want.
Debit Card Facilities: The salary account holders receive free debit card facilities. Individuals can use the card for online and offline ATM Withdrawals. The bank also gives special offers on debit card purchases from time to time.
Personalized Cheque Book: Account holders receive a chequebook after opening a salary account with a recognized bank. The personalized chequebook facility helps you make easy and fast payments.
Online Fund Transfers: The salary account makes the sending and receiving of funds a cakewalk for its members. It supports online and phone banking facilities. The account holders can make payments, receive funds or shop their favourite deals without compromising the good things in life.
Reduced Fees: Some banks offer lower fees on demand drafts, NEFT/RTGS transactions, and cash withdrawals with a salary account.
Overdraft Facility: Some banks offer overdraft facilities where the account holder can withdraw money more than what is available in the account but only up to a certain limit.
Insurance: Account holders of this account can also enjoy free insurance coverage given by some banks. Some banks may cover hospitalisation, accidents, and other unlikely events in this insurance.
Rewards and Cashbacks: Some banks even offer exciting cashback and reward points on purchases made on the debit card of this account.
Any individual can be a salary account holder. The only criteria to do so is the tie-up between the bank and the organization. The employers collaborate with a bank where they can open a salary account for all their employees. If the employees don’t have bank accounts, the organization helps them with the procedure. Hence, the salary account is for anyone who owns an allowance from a firm or an organization.
With Jupiter Money, you can easily open a salary account and get all the benefits that come with it.
Difference Between Salary Account and Savings Account
People often confuse a salary account with a savings account.
However, it should be clear that a savings account is for individuals to store and earn extra funds, whereas a salary account is a savings account for salaried individuals. It saves money for the professionals and helps them make an interest in it.
You must be employed with a company that has an account relationship with the bank
Anyone above 10 years of age fulfilling the nationality requirements is eligible to open a savings account.
Minimum Balance requirement
No minimum balance is required to open a salary account.
Individuals need to maintain a balance in their savings accounts.
Purpose
The primary purpose of a salary account is to credit the employee’s salaries.
Savings account exists to promote savings by people.
Benefits offered
More benefits are offered to the salary account holders.
The benefits offered under savings accounts mostly have a fee.
Basic requirement
Banks require to have a tie-up with the organisation.
No such requirement is there to open a savings account.
Conversion Of Accounts
Can I convert a salary account into a savings account and vice versa?
The answer is YES!
The conversion is possible both ways.
If you hold a savings account in the same bank with a tie-up with the organization, the bank converts it into a salary account at the employer’s request. Similarly, some banks may even convert a salary account to a savings account if you do not receive any payments in your salary account for three continuous months.
Hence, the conversion process is less time-consuming and super easy. You can avail of it anytime for any of the above cases.
Why Choose Jupiter’s Pro Salary Account?
No Minimum Balance: Jupiter is a fully digital bank with zero minimum balance requirement. It eases’ all your transactions and releases you from expenses like penalties and charges for not maintaining a minimum required limit
Health Cover: Having a salary account with Jupiter money entitles you to many other benefits. Jupiter gives you a health cover of 2 Lakh with cashless coverage(Terms and conditions applied). The health coverage works in more than 5000 network hospitals, supporting the account holders’ mental and physical well-being.
On-Demand Salary: Jupiter Pro Salary account has an exclusive ‘On-Demand Salary’ feature. It means that now you can turn any day into a salary day. There are no interest and processing fees. Also, it offers instant salary credits.
Rewards On Spendings: The digital bank has a reward for all your spending. Jupiter helps you earn various rewards like 1% rewards up to Rs 250 every month. The rewards are on all debit and UPI expenditures and are valid for an unlimited time.
Zero Forex Fee: There are no fees on foreign expenditures. Jupiter money skips the extra 3.5% charges usually levied on international spending.
Final Say
A salary account works as a balance between the employer and the employee. It is a no-minimum balance account that works best for all professionals. The salary account and savings account sound similar yet have different features. The banks make the conversion of accounts possible in case of any emergencies. However, you should choose the best bank for a salary account after proper research. Taking the topmost option entitles you to a variety of benefits.
Frequently Asked Questions (FAQs)
What is the use of a salary account?
The salary account is used to credit salaries. The bank opens the account at the company’s request and deposits a fixed income in the employee’s account every month.
How much money can I keep in my salary account?
You can keep a maximum of ₹2 Lakh in your salary account. The figures may vary from bank to bank.
Which type of account is a salary account?
A salary account is a type of savings account.
Can I change my savings account to a salary account?
Yes, you can convert your savings account into a salary account and vice versa.
What is the interest rate earned on a salary account?
The interest rate on your salary account varies from 3% to 4% annually. Different banks have different rates, but this is the average.
What is the minimum balance required for a salary account?
One of the biggest benefits of a salary account is that it is a complete zero-balance account. So, there’s no limit to keeping a minimum amount to escape maintenance charges.
What happens to your salary account after your resignation?
A salary account is converted into a regular savings account if it doesn’t receive any amount in the past three months.
Don’t miss out on this out-of-the-world banking experience
Don’t miss out on this out-of-the-world banking experience
Priyanka Rao is a content strategist for Jupiter.Money, and specializes in writing on topics related to finance, banking, budgeting, salary & wages, and other financial matters. She has a passion for creating engaging content that resonates with audiences across various digital platforms. In her free time, Priyanka enjoys traveling and reading, which allows her to gain new perspectives and inspiration for her work. With a keen eye for detail and a creative mindset, Priyanka is committed to creating content that connects well with her readers, enhancing their digital experiences.
