What is a Salary Account?

Salary Accounts are a convenient way of paying the monthly salaries from the employer to the employee. It makes it easy for the employer and gives ‘Salary Account’ benefits to the employee.

By definition, a Salary Account is a type of Savings Account in which the account holder's employer deposits a fixed amount of money as ‘salary’ every month.

A business (employer) has to tie up with a bank to open Salary Accounts for its employees—every month, the amount payable as salaries is transferred in bulk into all respective accounts. If you do not have an account with the bank your employer has a tie-up with, then the employer can assist in opening an account there.

Therefore, a Salary Account cannot be opened by just any individual; it has to be a tie-in between a business and a bank.

• Zero Minimum Balance Requirement
  Salary accounts usually have no minimum balance requirement, allowing account holders to manage their funds without worrying about maintaining a specific balance. This flexibility can be especially beneficial for those who prefer not to keep a large sum of money in their account. It also reduces the risk of incurring penalties for insufficient funds.

• Free Cheque Book, Passbook, and E-Statements
  Many salary accounts come with a complimentary chequebook, passbook, and e-statements. This feature eliminates the need for additional expenses related to managing and documenting transactions. Free access to these resources simplifies financial record-keeping and makes it easier for account holders to track their financial activities.

• Debit Cards and Online Banking Services
  Salary accounts typically include a debit card and access to online banking services. Debit cards facilitate easy access to funds for everyday purchases. At the same time, online banking offers the convenience of managing your account, transferring funds, and paying bills from anywhere without the need to visit a bank branch.

• Loan Convenience and Credit Card Offers
  Salary account holders often receive preferential treatment when applying for loans or credit cards. Banks view these accounts as a stable source of income, which can lead to faster loan approvals, lower interest rates, and attractive credit card offers. This benefit can be a significant financial advantage for those looking to borrow or credit.

• Demat Account Services and Utility Bill Payments
  Many banks offer integrated Demat account services and utility bill payment facilities with salary accounts. A Demat account allows for the electronic holding of shares and securities, streamlining investment management. The utility bill payment feature simplifies the process of paying regular bills, adding to the overall convenience of managing personal finances.

If your salary is not credited to the Salary Account for three successive months, your account is converted from a Regular Salary Account to a Regular Savings Account. Therefore, it is evident that a Regular Savings Account replaces all the facilities and benefits associated with the Salary Account.

On the other hand, if you join a company with a Salary Account tie-up with a bank in which you already hold a Savings Account, then on request, the bank can convert it into a Salary Account.

Besides the monthly salary credit in the Salary Account, you can also

• Deposit cash and cheques in it (if the amount of cash deposited is large, declaration of the source is needed)

• Transfer money to and from the Salary Account

• Withdraw money
   

Read more on how to deposit cash in your Salary Account.

With HDFC Bank InstaAccount open a Savings Account instantly in a few simple steps. It comes pre-enabled with HDFC Bank NetBanking & MobileBanking, and you can enjoy Cardless Cash withdrawals. Click here to get started!

* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.