With the evolution of banking services in India, banks today offer a variety of different accounts to meet varying customer needs. One such specialised account is a salary account, which is offered exclusively for individuals earning a salaried income. If you belong to this category of individuals, here’s everything you need to know about a salary account, its key features, the benefits of a salary account and more.
A salary account is a special type of savings bank account that is designed for salaried individuals. You can use it to receive your salary from your employer each month. Employers tie up with leading banks in the country to open salary accounts for all of their employees. This makes it easier for companies to manage their payroll and salary payment requirements.
Salary accounts are exclusively offered to salaried individuals only. Typically, opening a salary account online is only supported when a bank has a tie-up with the employer. So, any employee whose employer has partnered with a bank can open a salary account online with that bank.
However, in some cases, a few banks may allow salaried professionals to open a salary account independently. This is generally only allowed after the bank has thoroughly verified the applicant’s source of income.
Before you open a salary account online, consider the following aspects to make an informed choice.
The salary account minimum balance requirement
The charges for ATM withdrawals and other services
The number, location, and accessibility of the bank's ATMs
The intuitiveness of the bank’s online and mobile banking platform
The bank's reputation for customer support and service
The interest rates offered on account balances
The additional benefits offered to salary account holders
This sums up the key details you need to know about a salary account. In most cases, your employer will carry out the due diligence on your behalf and choose a competitive service provider. As an employee, all you need to do is ensure that you are aware of the fees, features and benefits of your salary account. This will help you make the most of the account while you have it.
A salary account is often a zero-balance balance account, while the minimum balance for a regular savings account is typically higher. Furthermore, the additional benefits of a salary account may include a debit card, higher transaction limits and preferential interest rates.
Typically, a salary account is opened through your employer, who partners with a bank to provide this service to employees. However, opening a salary account online independently is possible with some banks.
The benefits of a salary account include no/low minimum balance requirements, minimal or zero non-maintenance fees, access to a wider range of financial products, preferential loan rates and various discounts.
When you change jobs, your new employer may require you to open a new salary account with their preferred bank. You can either close your previous salary account or convert it to a regular savings account, depending on your bank's policies.
While many employers prefer to pay salaries through salary accounts for convenience, it is not mandatory by law. You can request your employer to pay your salary to any bank account of your choice.