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Monday, October 25, 2021

What is the difference between salary and savings accounts; Know the interest rate, minimum balance and penalty rules

The rules of salary account are different from those of a savings account.

Difference in Salary And Savings Accounts: Salary account is an account opened in a bank, in which the person’s salary comes. Banks open these accounts at the behest of companies and corporations. Every employee of the company has a salary account in his name, which he has to operate himself. When the time comes for the company to pay its employees, the bank transfers the money from its account to the employees’ account as per the instructions of the company. The rules applicable to the salary account are quite different from the rest of the savings account.

No minimum balance required in salary account

Salary account is normally opened by the employer to give his salary to his employee. Whereas, a savings account is opened to save money and keep it in the bank. No minimum balance is required in the salary account, whereas in the bank’s savings account you are required to maintain some minimum balance.

Salary required to maintain salary account

If the salary has not been added to the salary account for a certain period of time (normally three months), the bank will convert the salary account into a regular savings account requiring minimum balance. On the other hand, if the bank approves, you can convert your savings account into a salary account. You can do this when you change your job and your new employer wants to open your salary account with the same bank.

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Same interest rate in both accounts

The rate of interest on salary and savings account remains the same. The bank pays interest at the rate of about 4 percent in your salary account. A corporate salary account can be opened by anyone who takes salary from the company. A salary account opens your employer, while anyone can open a savings account.

Minimum balance is necessary if salary is no longer in the account

If you have changed your job, and you have not closed or changed your salary account, then keep a minimum balance in it. If not doing so, the bank can impose maintenance fee or penalty on that savings account.

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Nisha Chawlahttps://www.businesskhabar.com/
She is an expert in Banking, Finance and working with an international bank. She sharing her ideas and knowledge with Business Khabar.
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