A Salary Account is a Savings Account where the employee receives their salary from the employer every month. Major companies and corporations have tie-ups with specific banks where they open their employees' Salary Accounts. As Salary Accounts are interest-bearing, the account holder earns interest on the funds maintained. The interest is typically calculated daily and deposited into the account quarterly.
Some of the features and benefits of a Salary Account
Zero minimum balance
A Zero-Balance Salary Account is an account in which no balance is mandated. Account holders don't need to be concerned about keeping their account balance above a specific limit or paying any penalty. This account's Zero-Balance nature provides salaried employees more flexibility about managing their money.
Online fund transfers
With a Salary Account, account holders can also send or receive funds online anywhere. This eradicates the need for cheque deposits or cash withdrawals to transfer funds. Some banks also offer Mobile Banking facilities, allowing account holders to manage transactions from home.
Debit Card
Employees are provided with an ATM card to use for cash removals at ATMs and online or offline Debit Card payments. Account holders also receive personalised Chequebooks for cheque payments.
Easy access to Loans
Banks also offer Salary Account holders instant access to various Loans. If you want a Personal, Home, or Car Loan, having the Salary Account in the same bank will simplify and speed up the documentation process. Even the interest rate is typically more competitive for existing account holders.
Investment services
A Salary Account lets account holders invest in Mutual Funds, Insurance, Bonds, etc. A Demat Account can also be merged into the account for stock investments and trading.
Choosing the correct bank
The features and benefits can vary between banks; employers should choose a bank carefully to ensure their employees are offered the best benefits.
Tips to choose the right bank
Fee structure
Look for a Salary Account with minimal or no maintenance fees. Some banks may offer fee waivers based on certain conditions, so be aware of any applicable charges.
Interest rates
Check the interest rates offered on the savings component of the Salary Account.
Minimum balance requirements
Pay attention to the minimum balance requirements. Some banks may have higher minimum balance criteria, and falling below this balance could lead to charges.
ATM and branch accessibility
Consider the accessibility of the bank's ATMs and branches. Choose a bank with a widespread network to ensure easy access to ATMs and branches, especially if you need frequent withdrawals or visits.
Conclusion
A Salary Account is designed to streamline the salary disbursement process from employers to employees. Choosing the right bank based on individual needs and preferences is key to achieving financial well-being and security.
