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Salary Account: 5 Must Know Points For Salaried Individuals


Salary account is not a uncommon term for salaried individual. It is a type of bank account, where the salary gets credited. As savings account can be opened by anyone, salary account will be opened by the employer for its employees.


There are different types of salary account based on the salary of the employee. Say for HDFC Bank there are premium salary account, regular salary account, defense salary account, salary classic account.

 Difference Between Salary Account and Savings Account (SB Account) In A Bank Difference Between Salary Account and Savings Account (SB Account) In A Bank

Salary Account: 5 Must Know Points For Salaried Individuals

Here are 5 things to know about Salary account

1) Zero balance account

The main advantage of having a salary account is there is no need to maintain minimum balance in the account. Where as for other accounts one needs to maintain minimum balance based on the account and type of bank (public or private bank).

2) Preferential service

Preferential service and easy availability of credit cards and loans. There will be additional services on number of ATM withdrawal, Overdraft facility, demat account etc,.

3) No interest paid

Interest is not paid on the amount in the account. Where as for savings account 4 per cent-6 per cent is paid on the balance amount in the account, depending on the bank, where you open.


4) Convertibility

If the salary is not credit for 3 consecutive months, it is considered as savings account. In such case, you need to maintain minimum balance as prescribed by your bank.

5) Reimbursement account

Reimbursement accounts are offered to employees of corporates who already have a salary account with bank. Various Reimbursements other than salaries paid by the employees can be routed through this account.

Why do banks open salary account with zero balance?

A question that often arises is: what do banks gain by opening a salary account with zero balance. In the normal course, the bank gains by you maintaining an average monthly balance. But, here you are not charged for maintaining a zero balance, plus you get cheque books etc., free of cost.

How does it become profitable to the bank? Actually, it does. The bank starts selling you products and services like home loans, car loans, portfolio management, mutual funds and makes money, through other products and services. It also has the assurance that your salary would go in its bank and hence has additional security on a loan like a personal loan.

In the end it is not really a loss for the bank, to maintain a zero balance salary account. They may fleece you in some other way. After all, they are in the business of making money, like most banks and corporates.

Read more about: savings account banking
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