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Handbook to know your Salary Account Better

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July 7, 2022


What’s Inside

“Twelve thousand, four hundred and thirty-nine”, declared the clerk as he explained to me the salary structure. It was my first ever job, and the thought of getting so much money gave me a high. Just when my thoughts made me smile, the clerk told me to fill out an application form to open my salary account. “Salary account?” But I already had a bank account; did I need another one?

Thankfully, the kind clerk answered all my questions, like what a salary account is and how it differs from others. And now, years later, here I am, sharing the knowledge forward. 

What is a Salary Account?

A Salary account, by definition, is a form of savings account through which corporations or companies pay their employees' salaries each month. It not only simplifies things for the company but also provides other benefits to the employee.

Who can Open a Salary Account?

A company or employer generally collaborates with a bank to open employee salary accounts. If you do not have a bank account with which your employer has a partnership, your employer can help you get one. Here are a few things to remember when opening your salary account.

What are the Benefits offered through a Salary Account?

Zero Balance Account

A salary account is typically a zero-balance account. Account holders do not have to worry about maintaining a certain balance or incurring a penalty. Because of this, salaried employees have more flexibility in managing their money.

Debit/ Credit Card and Personalized Cheque Books

Employees are also given an ATM card, which they can use to withdraw cash from ATMs and make online or offline card payments. Account holders are also given personalised chequebooks to use for cheque payments.

Net Banking and Mobile Banking

With a salary account, account holders can send and receive payments online from anywhere in the world. This eliminates the requirement for cash withdrawals or cheque deposits to complete the fund transfer. Some banks also provide phone banking services, allowing customers to manage their accounts from their homes.

Easy Loan Access

Salary account holders can also get fast access to various loans from banks. Having your salary account in the same bank as your bank account makes the paperwork smoother and faster, no matter what type of loan you're searching for a personal loan, a vehicle loan, or a home loan. Even the interest rate for existing account holders is often more competitive.

Simplified Investment Services

A salary bank account allows account users to invest in mutual funds, insurance products, government bonds, and more. A Demat account can be linked to a salary account for stock investing and trading. Individuals can use the salary account to deposit cash or cheques, withdraw funds, or transfer funds to and from the account.

Difference Between Salary Account And Savings Account

Although a salary account is a savings account, the two differ. Let's have a broad look at some of them:


Savings Account

Salary Account

Minimum Balance Requirement

For regular savings accounts, every bank has a minimum balance limit that varies by bank, area, and account type.

For salary accounts, there is no minimum balance requirement. Premium salary accounts, on the other hand, have a minimum salary threshold that varies from bank to bank.


The primary goal of opening a savings account is to save money while also receiving adequate rewards and liquidity.

The basic purpose of a salary account is to receive the salary.

Interest Rates

The interest rate differs from one bank to the next.

The rate of interest is generally the same as a savings account

Who can open the account?

A savings account can be opened by anyone, in their individual or joint capacity.

A salary account can only be opened by salaried individuals whose employer has a tie-up for salary proceedings with the bank.

What are the benefits offered?

The bank offers all of the standard features of a typical savings account.

banks normally give higher and more appealing perks to salary account holders.

Conversion of Accounts

If your salary has yet to be credited to your salary account for a particular time, typically three months, the bank will convert it to a standard savings account with a minimum balance requirement. Keeping the same salary account would be feasible if you switch jobs and your new employer has a banking arrangement with the same bank for its workers' salary accounts.

How to Choose A Good Bank For Salary Account?

Though your employer selects the bank where you would have to open a salary account, here are the things that indicate to you which is a good bank for a salary account -

Network of ATMs

‍Try opting for a bank where you can get free access to other banks' ATMs throughout India. You can prefer a bank with a broader network of branch offices and ATMs.

Rate of interest‍

‍You must look for a bank that offers an interest rate on a salary account. On salary accounts, several banks provide incredibly high-interest rates.


‍A few banks offer employees extra reward points and other benefits with a salary account.

Credit cards ‍

‍It is helpful if a debit card or, in some instances, a credit card comes with a salary account. This implies you can withdraw cash from ATMs and pay using your card instead of money at various locations and stores.


‍With the risk of online fraud, it is critical to assess banks in terms of safety and take all cyber-security measures to protect your data and money online.

Customer Service

‍You should look into your bank's customer service before opting for the bank. It is always better to opt for a bank that offers 24x7 service and has a firm turnaround time in resolving customer queries. 

Benefits of Keeping your Salary and Savings Account Separate 

One of the most tried and tested money habits is to keep one’s salary account and saving account separately. Certain benefits are directly related to maintaining salary and savings accounts separately. They are as follows: 

Keeps your Finances Maintained

To keep your finances organized, maintain separate salary and savings accounts. Use your savings account to pay fixed and variable costs, utilizing services like online banking, mobile banking, and UPI. Paying bills and premiums from a single account helps track expenses effectively. Avoid managing all costs from your salary account to ensure better financial tracking.

Helps you Earn More Interest

Although most banks charge the same interest rate on salary and savings accounts, some institutions charge a significantly lower rate on salary accounts. In that situation, you should transfer your cash to a high-interest savings account to maximise your interest earnings. 

Helps you in Keeping your Savings Intact

Separate accounts help track spending and maintain savings. By budgeting and transferring only necessary funds to your savings account, you meet monthly expenses and limit withdrawals from your salary account. This encourages saving. Digital channels enable instant balance checks and fund transfers in emergencies.

Make the Most of Extra Benefits and Rewards

As previously stated, the salary account offers a variety of benefits and cashback on online transactions made using debit and credit cards, mobile banking, internet banking, UPI, and other methods. Your pay and savings accounts will undoubtedly give different incentives and advantages for different types of transactions, especially if these accounts are with two separate banks.

Summing It Up

Although salary accounts are a type of savings account, they have several features and perks that make them more beneficial than savings accounts.  

Open a Salary Account with Fi 

Fi, and its licensed partner Federal Bank, provides a salary program with many benefits. You get 2% cashback when you shop using Fi — with UPI or Debit Card. Other perks include no minimum balance, a free VISA Platinum debit card with zero forex charges, priority customer service, and a ₹500 Amazon voucher as a joining bonus. It is also clubbed with features like Connected Accounts, Analyser, Goal-based saving, SIPs & automatic payments. 

Frequently Asked Questions

1. What is the benefit of a salary account?

Salary accounts vary in benefits across banks, but the common ones are features such as debit cards, phone banking, net banking, zero minimum balance, online fund transfer, utility bill payments, Demat account/services, free passbook/cheque book/e-statements, loan conveniences, and credit card offers. 

2. Can I Deposit Cash in my Salary Account?

Yes, you can deposit cash in your salary account. This will require you to visit the nearest branch of your bank and fill out a form and submit it to the cashier with the amount you want to deposit.

3. Can I use my Salary Account if I have Changed Employers?

Yes, but in that case, you must visit the nearest branch with a letter or e-mail from the official Company email ID if an agreement exists. Your full name and the account number should be included in the letter/ email, as well as a statement that you have joined the organisation.

4. Can a Salary Account have a Joint Applicant?

Yes, a parent, spouse, sibling, or child can apply for an account as a joint applicant. In that case, a valid photo ID and proof of address of the joint application will be required.

5. What is the Minimum Balance Required for a Salary Account?

In most cases, there is no minimum balance requirement for salary accounts.


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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