While we all understand what the savings account is, many of us might be under the wrong impression that salary account and savings bank account are one and the same things. We do not intend on saying that the two are entirely different but there are some major differences between the two that separate them from each other.

 A Salary Accounts can be opened on request of organisations and companies where each of its employee gets their own salary in the salary Account. Hence, an employee of the organisation gets a personal Salary Account where they can receive their salary each month. On the other hand, A Savings bank Account can be opened by anyone whether they are salaried or not. Typically, people who are not salaried open Savings Account to manage their finances daily and to get an interest-generating deposit account.

To understand some of the key differences between Salary Account vs Savings Account; Here are a few key pointers to understand the same.


A Salary Account is facilitated by a company and has the purpose of crediting the salary to their employees directly into that account. Moreover, a Savings Account can be opened by anyone and everyone with the help of Aadhar, PAN Card along with other details. After which the person is liable to pay, withdraw and do any kind of lawful transactions from the bank account.

Minimum Balance Requirement

When it comes to maintaining a minimum balance in the accounts, in a salary account no minimum balance required and in savings bank account a certain amount of minimum balance might be required to maintain. However, presently many banks also offer zero balance savings account as well.

Conversion of One Account to the Other

When the salary is not credited to your Salary Account for some time, the bank will transform your Salary Account into a traditional Savings Account that will require maintaining a minimum balance. On the other hand, it depends on the bank for a savings bank account, and you can apply to convert your Savings Account to your Salary Account. It is possible when you change your work, and the organization happens to have a banking association with the same bank for its worker’s Salary Accounts.

Also Read: How to Convert a Salary Account to Savings Account?

Interest Rates

While understanding what is the difference between a salary account and a savings account you must know that there is hardly any difference in the interest rates in both bank accounts. However, in some cases such as High yield savings accounts we can earn more interest on the saved funds.

Who Can Open the Account?

A corporate Salary Account can be opened by an individual whose company has a salaried relationship with the bank. Moreover, when talking about a savings account, anyone and everyone willing to open an account can opt for a savings bank account in a bank or a financial institution.

Account Holding Capacity

An individual can only hold a salary account but for savings bank account it can be individual as well as joint as per your preference.

Credit Card

For a salary account holder credit card can be offered depending on one’s monthly salary credited in the account but for a savings account it can be offered by some providers as depending on their criteria.

Loan Disbursal

In a savings account, it might get difficult depending on varied constituents like low credit score, instability in funds, etc. However, for a salary account, it is easier to get a loan since regular credit of salary grants security. It is one of the key differences between salary account and savings account.

Similarities between Salary Account and Savings Account

However, we have mentioned many differences between there are a few similarities between the two accounts as well. The features which the two accounts coincide are as follows –

  • Quick and easy formalities to open an account
  • In both the accounts you get a passbook/statement
  • Alerts for account transactions.
  • Both provide with electronic funds transfer - NEFT/RTGS/IMPS
  • Branch services – cash deposit, withdrawal of funds etc.
  • Collection and payment by cheque can be done in both the bank accounts.
  • Phone and Net banking
  • In both the accounts you get Interest/TDS Certificate
  • Balance confirmation certificate
  • Demand Draft – cancellation, revalidation, and duplicate issue
  • Enquiry of Balance
  • Both the bank accounts allow 24/7 banking services.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.