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.
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.
A salary account has the following benefits:
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.
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.
The table highlights the key differences between a salary account and a savings account.
|Salary Account||Savings Account|
|Eligibility||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.|
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.
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.