Salary Account: Features and Benefits

Posted by Rajiv Manchanda on August 16th, 2019

One of the first things that a company does when you get a new job is to get a salary account opened in your name. If you already have an existing account with the bank that the company has a tie up with, you will have to convert your existing account into a salary account. But what is this type of saving account?

A salary account is a zero-balance saving account which is opened for an employee when he joins an organization. Usually, a company ties up with a few banks with whom its employees can open accounts for crediting salary. Once this account is opened, the company will credit monthly salary into this account.

Features of Salary account:

The salary account is a zero-balance saving account. This means that there is no minimum balance that you need to maintain in this account. There are no fees if the balance in this account goes to zero.

One important thing to remember is you cannot open this online bank account with zero balance. A salary account can only be opened by a company which has tied up with banks.

This bank account has all the regular features of a savings account like a free cheque book, net banking, mobile banking, debit card etc.

Depending on the bank, there are different types of salary accounts. These accounts are usually on the bank website with different features.

If no salary is credited into the salary account for a few months, depending on the bank’s rules, the account automatically gets converted into a regular savings account with minimum balance requirements.

One type of salary account is reimbursement where companies can credit any reimbursements made to the employee.

Benefits of a salary account:

A salary account is an online bank account with zero balance. It is possible to operate internet banking, make fund transfers, move funds from a salary account to a saving account etc. The debit card that comes with this account can be used to withdraw funds from an ATM.

Some banks offer the same rate of interest on a salary account as they do on a regular savings account. Generally, most banks offer interest on zero balance saving account.

You get a free debit card with this account. Depending on the bank and the type of salary account, it may be a RuPay card.

This online bank account with zero balance can be used for making online purchases and even be used to make investments. It is exactly similar to a regular savings account in its operation. This account can be linked to a Demat account to make investments in the stock market as well. It is possible to make fixed deposits with the funds from this account too.

Banks give beneficial rates on loans and other offerings to salary account holders.

Some banks offer special defence salary accounts for defence pensions, salaries and other emoluments.