A Salary Account caters to the needs of salaried individuals. It is usually one of the first things that newly hired employees of an organisation get from their employer. Such an account forms a convenient way to pay your monthly salary. A Salary Account can also be beneficial. Let us understand this account better along with its benefits.
Understanding a Salary Account
A Salary Account is provided to salaried customers through their organisations. It offers a convenient way for the employer to pay the monthly salary to their employees. While it is a special Savings Account, it differs from a basic Savings Account. When it comes to a Salary Account vs Savings Account, the former is opened by the organisation to credit the salary of their employees monthly.
On the other hand, anyone can open a Savings Account at a bank to deposit and save money in the long run.
Who can open the account?
Usually, companies need to tie up with a bank to open Salary Accounts for their employees. Hence, it cannot be opened by the employees themselves.
Advantages of Salary Accounts
The benefits offered by Salary Accounts might differ across banks. However, a few of the common benefits include:
- No minimum balance
Salary Accounts are usually Zero-Balance Accounts. As an account holder, you need not worry about maintaining a certain balance in your account or face a penalty. Consequently, salaried employees enjoy more flexibility in how they want to manage their Salary Accounts.
- Access to Debit Cards
A Salary Account offers an ATM or Debit Card to employees. They can use such a card to withdraw money at ATMs and make offline and online payments. Account holders also receive a chequebook with their Salary Account.
- Offers interest
Banks typically offer interest on the sum in your Salary Account, and the rate usually depends on the type of Salary Account you have
- Transfer funds online
Salary Account holders can receive and send funds online from anywhere in the world. This eliminates the requirements of withdrawing cash or depositing cheques to transfer funds from such an account. Salary Account holders can also access Online Banking services.
- Access investments
People with Salary Accounts can easily invest in Mutual Funds, Insurance products, Government Bonds, and more using their Bank Accounts. They can also link a Demat Account to their Salary Account to invest in stocks and trade.
- Pay bills swiftly
You can utilise your Salary Account to pay your utility bills.
Conclusion
Salary Accounts are Savings Bank Accounts that offer multiple benefits. However, some of their features and benefits make them more advantageous than a Savings Account.
