Salary Accounts can only be opened when an employer has a banking relationship. With the help of this partnership, the employer is able to deposit the employees’ monthly salary in bulk to their individual Salary Accounts. Depending on which employees receive benefits & facilities connected to their salary accounts, employers choose among the best bank for salary accounts.
In new employment, you must open a salary account with a bank. To open a salary account with the connected bank after starting a new job, the employee must provide his or her information to the same bank.
Know about Salary Accounts in India.
Account for Reimbursements
Many a time, other parts of the gross compensation, such as the travel allowance, are credited each month to separate “reimbursement accounts.” Accounts for reimbursement are always held at the same bank as the employer’s salary accounts. The account makes managing money simple. You must complete the following in order to start a reimbursement account:
- Payroll Account information
- Debit Card information
What to Take Into Account When Choosing The Best Bank For Salary Account
Choosing the best bank for salary account can be difficult. Before making a decision, take into account the following factors.
- Are your funds secure?
- Are services like mobile and online banking offered?
- How many bank branches are located in your city? Additionally, if you frequently travel, you should find out if the bank has any branches in additional towns and nations.
- Examining the bank’s terms and conditions in detail and asking the bank’s representative are the best ways to determine whether the bank has any unstated regulations or policies.
- The minimum balance that you must keep in your account should be checked.
- What is the interest rate being offered by the bank?
- What fees are associated with transactions?
- What quality is the bank’s customer service?
These are the main points you can consider when you decide on the best bank for salary account.
Choose the best suitable option among the various banks
Documents needed to start a salary account-
- A properly completed account opening application.
- Identification and address proof such as PAN Card Voter ID Card Driving License Passport Aadhaar Card.
- An identification card issued by a Public Sector Unit (PSU) of the Central or State Government or an NREGA Job Card.
- Most recent passport-size pictures.
- Position Letter (as proof of employment with the company).
Keep in mind that a business ID is not recognised as valid identification. It must be an identity document issued by the Indian government.
The opening of the salary account might be facilitated by the employer. Some banks even allow you to apply online for a salary account and receive your debit card, chequebook, and account number within a few days!
Difference between a salary account and savings account
|Basis||Salary Account||Savings Account|
|Primary objective||For an individual’s savings and account maintenance.||For a company to transfer salary to an employee’s account.|
|Opening criteria||Anyone and everyone with saving money.||Salaried individuals only.|
|Minimum balance||Yes, differs from bank to bank.||NA.|
|Conversion to another account type||Can be converted to a salary account if the employer has linked their salary processing with the same bank.||Will be converted to a regular savings account if no salary is credited to 3 months.|
|Freedom of bank choice||One is free to choose the bank which suits his/her requirements||One is bound to open an account in the bank to which the employer has linked.|
Similarities between a salary account and a savings account
- Account opening process for both accounts is easy and convenient.
- The operations for preparing and issuing passbooks are uniform.
- NEFT/RTGS/IMPS payments are enabled on both accounts.
- All accounts send you SMS alerts about your transactions.
- All accounts include phone and internet banking.
- All accounts have services available around-the-clock.
- All account holders can use ATMs with their debit cards without being charged.
- The tax impacts are the exact same for either account.
- These accounts support automated payments.
- Each account holder has a credit card offered to them.
Following a job change, should I close my previous salary account?
Surely, the thought of “what will happen to my salary account” has crossed your thoughts if you are changing employers and are already associated with the best bank for salary account. Shall I close it? Should I make it savings account instead? Making these choices isn’t difficult; all you need is the precise quantity of details we are giving you here:
Scenario 1: Think about keeping your existing salary account if your new company and the same bank have a salary account partnership.
Scenario 2: Take into account if your new company has a salary agreement with some other bank:
Consider your debit card offers. Do you receive nice deals on it? Does it fit your spending habits, allowing you to save money while you spend it via reward points or cashback? If so, it might be wiser to keep it going with this account. To continue receiving benefits, you can also think about switching to a savings account.
Unsure about keeping a standard balance required? Then, It might not be smart to convert to a savings account. The typical monthly balance requirement for several banks might range from Rs. 500 and goes up to Rs. 10,000. If unable to maintain so, banks can impose heavy fees.
Although a salary account is a form of savings account, it differs in a few ways. So, before closing or converting your salary account to a savings account, carefully analyse the advantages and disadvantages of both types to avoid any kind of penalties to come. Choose the best bank for salary account only after doing thorough research and analysis.
To sum up, a salary account is an important service that a professional receives. Employers must take the best bank for salary account into account when selecting a financial institution for a partnership. You can choose the finest option by consulting the list of top banks to open a salary account. You should thoroughly research variables like interest rates, ATM availability, and other added features before selecting the most palatable choice and the best bank for salary account. Keep an eye out and guard against uncertainty.