Savings Account
Vs Salary Account:
What is the
difference?
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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.
Purpose
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.
Interest Rates
While understanding what is the difference between salary account and savings account you must know that there is hardly any difference in the interest rates in both the bank accounts. However, in some cases such as High yield savings account 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 –
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