What is a Salary Account? Know its Benefits and Features
December 22, 2021
Salary accounts are feature-packed payroll accounts exclusively offered to employers and employees. Read this post to know what it is and what are the top features and benefits of this account.
One of the first things that newly hired employees of an organization receive from their employer is a salary bank account. The employees are required to fill an application form which is submitted to the bank by the employer for opening the salary account. It is in this bank account that the employer deposits the monthly salary of the employee.
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 the salary account-
What is a Salary Account?
A salary account is a type of savings bank account in which an employee receives their salary from the employer every month. Major companies and corporations have their tie-ups with specific banks where they open the salary account of all 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 are the Features and Benefits of a Salary Account?
While the salary account benefits and features can vary between banks, here are some of the most common ones-
Zero Minimum Balance
A salary account is generally a zero balance account. Account-holders don't need to worry about maintaining their account balance above a certain limit or any penalty. The zero balance nature of this account provides salaried employees more flexibility regarding how they manage their money.
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 making the fund transfer. Some banks also offer phone banking facilities that allow account holders to manage transactions from the comfort of their homes.
Debit Card and Personalized Cheque Book
Employees are also provided with an ATM card which they can use for cash withdrawals at ATMs and online/offline debit card payments. Account-holders also receive personalized cheque books for cheque payments.
Easy Access to Loans
Banks also offer instant access to a wide range of loans to their salary account holders. No matter if you are looking for a personal loan, car loan, or home loan, having the 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.
The account holders can easily invest in mutual funds, government bonds, insurance products, and more through a salary bank account. A Demat account can also be linked to the salary account for stock investments and trading.
Choosing the Best Bank for Salary Account
As the features and benefits can significantly vary between banks, employers should choose a bank carefully to ensure that their employees are offered the best benefits.
Some of the banks like ICICI Bank offer salary account online opening facility for enhanced convenience. With a simple online procedure and minimal documentation, employers can easily open salary accounts for all of their employees digitally without visiting the bank.