Companies often partner with banks to open salary accounts.
A salary account is opened only when you are working in an organised sector.
In India, two types of bank accounts can be opened by an individual: salary and savings account. A salary account and a savings account are two distinct types of bank accounts that serve different purposes. A salary account is opened only when you are working in an organised sector. There is no need to maintain any minimum balance in this account, like the savings account. This particular account allows you a facility of zero balance. Regular savings accounts require customers to maintain a minimum balance, failing which, they may be charged a penalty fee. Companies often partner with banks to open salary accounts for their employees. There are several benefits you can get on a salary account, and today we will tell you about all of them.
Free ATM transaction facility
Banks often offer free ATM transaction facilities to their customers who hold a salary account with them. Under this facility, you need not worry about how many times in a month you opt for ATM transactions. Banks typically waive the annual fee for ATM usage on salary accounts.
Loan facility
Special offers on personal loans are also available on a salary account. You also get a pre-approved loan facility on your salary account. There are also special offers available on housing and car loans.
Overdraft facility
Some salary accounts also offer an overdraft facility. This facility is often subject to certain terms and conditions, such as a minimum tenure requirement of two years or more. It’s a facility that allows you to withdraw money up to a certain limit, even if you don’t have a balance in your account.
Free passbook and chequebook facility
For instance, many banks offer free chequebooks, passbooks, and e-statement facilities to their salary account holders. This allows account holders to keep track of their transactions and account balances, both online and offline, without incurring additional costs.
Free insurance facility
Salary account holders are also eligible for a personal accident insurance benefit of up to Rs 20 lakh.
Free online transaction
Some banks provide free online transaction facilities to their customers on salary accounts, which means the NEFT and RTGS services are usually free. Many banks also offer the Immediate Payment Service (IMPS) facility on salary accounts.
How is a salary account different from a savings account?
Anyone can open a savings account, while a salary account can be opened by a person who is an employee of an organisation. A person’s salary account is opened only at the recommendation of the organisation.
In a savings account, customers are typically required to maintain a minimum balance in their account at all times. Failure to maintain this minimum balance can result in penalties or fees being charged. There is usually no such requirement for a salary account. This means that salary account holders can maintain a zero balance in their accounts, without incurring any penalties or fees.
The main purpose of opening a savings account is to encourage saving and to earn interest on the balance. A salary account is designed to receive regular salary payments from an organisation.
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