A salary account is essentially a savings account, but with one key difference—your salary is credited to it every month by your employer.
Unlike a traditional savings account, which is opened by an individual, a salary account is set up by the bank upon the employer’s request. This ensures that employees receive their salaries directly into their accounts.
While the two account types share similarities, there are distinct advantages to having a salary account that many may not be aware of.
Major Benefits of Having a Salary Account
1. Zero Balance Facility
One of the biggest advantages of a salary account is the zero balance feature. In a regular savings account, banks usually impose penalties if the minimum balance is not maintained.
However, with a salary account, you can maintain a zero balance without incurring any charges.
This gives you the freedom to use your funds without worrying about maintaining a set amount.
2. Easy Loan Approval
Salary accounts simplify the loan approval process for personal, car, or home loans. Since the bank receives regular income proof via your bank statement, your eligibility for loans is stronger.
With proof of a steady income, the bank finds it easier to verify your documents, increasing your chances of getting loan approval quickly.
3. Overdraft Facility
If you have a salary account for more than two years, you are eligible for an overdraft facility.
This allows you to withdraw money even when your balance is zero, up to an amount equal to two months’ basic salary. This facility acts as a safety net for emergencies when you need funds quickly.
4. No Charges for Basic Services
Salary account holders enjoy several free services, including a chequebook, passbook, and net banking.
Additionally, there is no fee for the SMS alerts related to salary credits, providing you with hassle-free access to essential banking services.
Important Considerations
It’s important to note that the benefits of a salary account are only available as long as your salary continues to be credited regularly.
If your salary is not credited for three consecutive months, your salary account may be converted into a regular savings account.
In this case, you will need to maintain the minimum balance required for savings accounts, and the extra benefits of the salary account will no longer apply.
