What is a Salary Account? Know its Benefits and Features

Salary Accounts are feature-packed payroll accounts exclusively offered to employers and employees. Read this post to know the top features and benefits of these accounts.

One of the first formalities that an organisation completes for its newly hired employees is to open their Salary Account. Employees are required to fill an application form which is submitted to the bank by the employer for opening the Salary Account. The employer deposits the monthly salary of the employee in this account.

If you are a new business owner or someone who is about to start their professional journey, here are a few things you should know about Salary Accounts.

What is a Salary Account?

A Salary Account is a type of Savings Account in which an employee receives their salary from their employer every month. Major companies and corporations have tie-ups with specific banks where they open the Salary Accounts of their employees.

As Salary Accounts are interest-bearing accounts, the account holder earns interest on the balance maintained in the account. The interest is generally calculated daily and deposited into the account quarterly.

What is the minimum balance requirement of an ICICI Bank Salary Account?

There is no minimum balance requirement for an ICICI Bank Salary account, assuming your salary is credited in the account. In case the salary is not credited for 3 months, the Salary Account will be converted to an account with minimum balance requirement as per the Bank’s guidelines.

What are the Features and Benefits of a Salary Account?

While the benefits and features of Salary Accounts can vary between banks, here are some of the most common ones:

1. No Minimum Balance Requirement

A Salary Account is generally a zero-balance account. Account holders don't need to worry about maintaining a minimum balance in their account. This feature provides salaried employees more flexibility in managing their money.

2. Online Fund Transfers and Phone Banking

Account holders can also easily send or receive funds online from anywhere across the world with a Salary Account. This eliminates the need for cheque deposits or cash withdrawals for transferring funds. Some banks also offer phone banking facilities that allow account holders to carry out banking transactions on call.

3. Debit Card and Personalised Cheque Book

Account holders are also provided with a Debit Card that they can use for cash withdrawals at ATMs and for online / offline payments. Account holders also receive personalised chequebooks for cheque payments.

4. Easy Access to Loans

Banks offer instant access to a wide range of loans to their Salary Account holders. Be it a Personal Loan, Car Loan or Home Loan, having a Salary Account in the same bank will make the documentation process easier and faster. Even the interest rate is generally more competitive for existing account holders.

5. Investment Services

Salary Account holders can easily invest in Mutual Funds and Government Bonds and purchase insurance policies through a Salary Account. A Demat Account can also be linked to the Salary Account for investments and trading.

Choosing a Bank for Your Salary Account

As features and benefits of Salary Accounts can vary significantly from bank to bank, employers should choose a bank carefully to ensure that their employees are offered the best benefits.

Some banks like ICICI Bank offer an online account opening facility for enhanced convenience. With a simple online process and minimal documentation, employers can easily open Salary Accounts for their employees without visiting the Branch.