The first account we opened at the bank is Savings Account. Be it a Minor or Joint Account; there are different accounts available under it. However, the moment we start our career and seek employment, our organisations generally open a Bank Account called the Salary Account. This is slightly different from the Regular Account. Most of them have both accounts. So, how are they different?
Here is a detailed comparison between Salary and Savings Account.
Purpose
Anyone can open a Savings Account irrespective of their age, gender, caste, or religion. Banks also have the facility for Minor, Women, Senior Citizens, Joint, and Government-related accounts. You can open such an account for parking your hard-earned money or operate other financial transactions.
Meanwhile, organisations provide Salary Accounts for crediting monthly income. Companies also deposit bonuses and other remunerations instead of services rendered by the account holder.
Opening of accounts
Those who wish opening Saving Account online can do so in their desired bank. The factors depend on the interest rates offered, minimum balance requirement, and other facilities. Most banks have their Banking app to simplify the opening process. However, with Salary Accounts, the holders do not have the liberty to choose their bank.
Generally, the company opts for the same bank for all employees, where it gets easier to deposit their monthly wages.
Documentation
When you open an online Bank Account, banks ask for detailed documentation. They verify them before granting access to the account. Based on the papers provided, the bank sends a customised ATM or Debit Card, chequebook, passbook, and Net Banking login credentials via a welcome kit. As for Salary Accounts, banks conduct a quick verification of documents and give an instant kit with similar items.
Here, you can ask for a customised Debit or ATM Card and chequebook once the first salary is credited.
Balance maintenance
Banks require their account holders to maintain some amount as the average monthly balance in their account always. This is a prerequisite for Regular Savings Account. The balance maintenance differs between banks. Meanwhile, that is not the case with Salary Accounts. Precisely why, Salary Accounts are also called Zero-Balance Accounts.
Withdraw your income from the account according to the prescribed daily withdrawal limit, but that should happen. This is the biggest difference between both banks.
Conversion
Most banks automatically convert your Zero-Balance Account to Regular Account if the salary does not credit for a specific tenure (three months). A few also enable you to convert your Regular Account to a Salary Account based on a job change, a new employer’s relationship with your current bank, and more.