Salary Account Vs Savings Account

A Salary Account is an account to which your salary gets credited. Usually, banks open these accounts at the request of corporations and major companies. Each company employee gets their own Salary Account, which they operate independently. When the time comes for the company to pay its employees, the bank debits the money from the company’s account and then credits it to the employees accordingly.

So, what exactly is the difference between a Savings Account and a Salary Account?

1. Purpose
   
   A Salary Account is usually opened for an employer to credit the employee's salary. On the other hand, a Savings Account is opened to deposit money to hold or save it with the bank. Both Savings and Salary Accounts can be opened as an Insta Account.
   
   

2. Minimum Balance Requirement
   
   Salary Accounts usually don't have a minimum balance requirement, while banks require that you maintain a certain amount of minimum balance in your Savings Account. If you open an Insta Saving Account, you can use even the Saving Account without requiring a minimum balance for up to a year.
   
   

3. Conversion
   
   Suppose the salary has not been credited to your Salary Account for a certain period (usually three months). In that case, the bank will convert your Salary Account into a regular Savings Account with a minimum balance requirement. On the other hand, if your bank permits, you can convert your Savings Account to your Salary Account. This is possible if you change your job, and your new employer happens to have a banking relationship with the same bank for its employees' Salary Accounts.
   
   

4. Interest rates
   
   Banks offer interest on both Salary as well as Savings Accounts. The interest rates depend on your Savings/Salary Account type.

An individual whose company has a salary relationship with us can open a corporate Salary Account. The employer creates a Salary Account.

The purpose of the account is such that it makes sense for the employer to be the one who creates it. In contrast, anyone can open a  Savings Account. You can choose from various  Savings Account  variants here.

These differences are helpful when considering any conversion of a Salary Account into a Savings Account or if you frequently switch jobs. 

In the case of the latter, if you have not closed down or converted any previous Salary Account after switching employers, then be sure to do so. Otherwise, banks will charge a maintenance fee or a penalty for not maintaining a minimum balance on these now converted Savings Accounts. 

Yes, if an arrangement exists, we request you to visit the nearest branch along with a letter or email from the official Corporate email ID. The letter/e-mail should have your complete name and account number and state that you have joined the corporate.

Yes, employment confirmation is required to ensure that you are an employee of the company.

Yes, a parent, spouse, child or sibling can be a joint applicant to an account. The joint applicant must submit a valid photo ID and address proof. 

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!

Know more about the  Current Account and Savings Account here.

*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.