Who can Open a Salary Account? And its Features
Salary accounts are payroll accounts offered to employees by their employers for salary transfers. When an employee joins an organization, they are asked if they want a salary account to be opened. Post this, they are required to fill out a form, and all the information is used to open the employee a new salary account.
However, the use of salary accounts isn’t limited to salary transfers and withdrawals. Salary accounts are packed with features and offer many benefits.
If you are a business owner or an employee who is about to start their professional journey, this article is for you. It covers in detail all the features and benefits of a salary account to help you understand how it works. Let’s get started.
Table of Contents
Who can open a salary account?
People can’t open a payroll account in their name if they’re not employed. A company can open corporate payroll accounts on behalf of the employee. The company must work with a bank and establish payroll accounts for all employees. The human resources department then transfers the individual amount to each bank account every month.
Salary Account Benefits
A salary account offers the main benefits of a savings account without having to open the account on our own. Employers can open salary accounts for salaried individuals and employees can simply start enjoying the benefits like no minimum balance, saving benefits, loan benefits, etc. We will discuss each benefit in detail below.
Moreover, a salary account is more beneficial for banks compared to savings accounts because the account receives a fixed amount of money every month, which makes it a fixed CASA source.
Salary Account Features
Here are the top features of salary accounts that account holders can benefit from:
No Minimum Balance
The minimum balance requirement for a salary account can vary depending on the bank and the specific type of salary account. However, most salary accounts can be maintained on a zero balance; account holders don’t need to worry about any penalty. And this is one of the biggest salary account benefits.
Chequebook/Passbook Facility
There is a free chequebook and passbook facility in the salary account. You can deposit cash as well as transfer the amount through cheques.
Debit Card Facility
Salary accounts also consist of debit cards for easy cash withdrawal. Account holders receive a debit card similar to savings accounts which they can use at ATMs to withdraw money.
Net Banking Facility
You can use net banking or phone banking to make online transactions using your salary account. Almost all banks today have their own mobile banking platforms that account holders can access on their phones and make transactions on the go.
Demat Account/Investment Services
A great salary account feature is that the account holder can invest in mutual funds, insurance products, government bonds, and more. For stock investment and trading, a Demat account can also be linked to the salary account.
Loan Benefits
Another great feature of salary account type is the access to a wide range of loans, including personal loans, home loans, car loans, etc. The documentation process is faster if the salary account is with the same bank. Existing account holders may even get interest benefits.
Credit Card Offers
Employees with salary accounts are eligible to apply for credit cards with limits depending on their credit scores. The credit card limit may also rely on the salary of employees.
Conclusion
Salary accounts are simple and beneficial. But, if the salary isn’t credited to the account for three successive months, it automatically converts to a regular savings account. And if you have an existing savings account in the bank that the employer uses for salary transfer, you can have it converted to a salary account.
Author Bio:
Priyanka Rao is a content strategist for Jupiter.Money, and specializes in writing on topics related to finance, banking, budgeting, salary & wages, and other financial matters. She has a passion for creating engaging content that resonates with audiences across various digital platforms. In her free time, Priyanka enjoys traveling and reading, which allows her to gain new perspectives and inspiration for her work. With a keen eye for detail and a creative mindset, Priyanka is committed to creating content that connects well with her readers, enhancing their digital experiences.
