If you are an individual eager to open a bank account, you may find yourself facing a choice between salary and savings accounts. To resolve the salary account vs. savings account dilemma, you need to understand how the two types of accounts differ from one another.

The Differences Between Salary Accounts and Savings Accounts

Check out the key differences between salary accounts and savings accounts in the table below. 


Salary Account

Savings Account

Primary purpose of the account

Designed to receive the monthly salary from your employer

Designed to help save money and earn interest on the account balance 


Salaried individuals 

Any individual (or HUF, in some cases)

Minimum Balance Requirements

Usually has no minimum balance requirements

Often requires a minimum balance, with fees for non-maintenance

ATM or Debit Card

Typically comes with an ATM/debit card, sometimes with special perks for employees

Comes with an ATM/debit card, whose features might differ based on the bank's policy

Account Conversion Option

Can be automatically converted to a savings account if no salary is credited for a specific duration

Doesn't convert to other types of accounts automatically

Fees and Charges

May have fewer charges, especially if linked to corporate tie-ups

Might have more charges, especially related to minimum balance requirements

Salary Account vs. Savings Account: Which is Right for You?

Now that you know what the differences between salary and savings accounts are, you can make an informed choice between the two. If you still need more clarity on the salary account vs. savings account issue and what the right option for you may be, here are some pointers that can help. 

A salary account may be right for you if: 

  • You receive a regular monthly salary from an employer

  • You're looking for an account with no minimum balance requirements

  • You want an account that may offer special perks like discounted loan rates or fee waivers due to corporate tie-ups

  • You prefer easier account management 

  • You want additional benefits tailored for salaried employees like salary advances 

A regular savings account may be right for you if: 

  • You're looking to save money over time and earn interest on your account balance

  • You don't have a consistent monthly salary or are self-employed

  • You want more flexibility in terms of deposits and withdrawals without employer-related constraints

  • You already have a salary account and want a separate account for specific savings 


This should give you a clear idea of the differences between salary and savings accounts. You can use the comparison mentioned above to resolve the salary vs savings account dilemma easily. However, if you want to experience the best of both worlds, you can open a salary account and a savings account (depending on your eligibility) and earn interest on the balances maintained in both accounts.

Frequently Asked Questions

What is the primary difference between a savings and salary account?

A salary account is a special type of savings account. It is specifically designed for salaried employees to receive their monthly salaries. However, a regular savings account is a general-purpose account where you can save money and earn interest on the balance. 

Can I earn interest on a salary account?

Yes, while salary accounts are primarily opened to receive your monthly salary, you will also earn interest on the salary account balance. This is a common feature in both salary accounts and savings accounts. 

Is there a minimum balance requirement for salary accounts?

No. The salary accounts offered by most leading banks come with the advantage of zero minimum balance requirements. This is typically not the case with savings accounts, which have minimum balance requirements that vary from one bank to another.

Can I convert my salary account to a savings account?

Absolutely. If you do not receive salary credits in your salary account for a specific period, many banks automatically convert it into a standard savings account. This transition may change the terms of the account, like the interest rates and minimum balance requirements.

Are there charges for not maintaining a minimum balance in a savings account?

Yes, while specifics can vary, many banks impose fees if you do not maintain the required minimum balance in your savings account.

Can I open a salary account if I'm self-employed?

No. Salary accounts are meant only for individuals who receive regular salary from an employer. If you're self-employed, a regular savings or a current account would be a more suitable option.

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