If you, like me, have to pay your employees a salary each month, you may want to consider opening a salary account for them. This specialised savings account has been a game-changer as it has simplified how I can pay my employees their salaries. Further, I have noticed many unique salary account features myself. Among the many benefits of salary accounts, my employees and I can enjoy seamless access to comprehensive net banking and mobile banking services.
Continue reading to understand all that a salary account entails and the benefits it provides me, my employees and the bank.
Salary accounts allow employers to pay their employees their monthly salaries seamlessly and conveniently. This account is classified as a kind of savings account wherein the employer is responsible for depositing a fixed amount of money each month in the form of a salary. Apart from the ease with which funds are transferred, these accounts provide their account holders, i.e., employees, with other banking benefits.
It isn’t unusual for companies and corporations to open salary accounts for their employees at large banks. As these accounts are also classified as interest-bearing accounts, they help their accountholders earn interest on the balance they maintain within their account. This interest is ordinarily calculated daily and is deposited into one’s account each quarter.
If you join a company today, one of the first things your employer is likely to do is help you with opening a salary bank account. This account is provided after you fill out an application form that your employer then deposits with their bank.
There are several ways in which salary accounts benefit the employers, their employees and the banks where these accounts are held. Some of these have been discussed below.
Salary accounts are often viewed far more profitably than savings accounts by banks. This is because salary accounts are set to receive a fixed amount of money each month from the account holders’ employer. This makes it a fixed stream of CASA (or current account savings account), which bodes well for the bank’s business.
While salary accounts allow monthly salaries to be credited, they also allow account holders to carry out the following tasks.
A large number of companies open salary accounts on behalf of their employees. That said, a few companies provide their employees with the right to choose the bank where they’d like to open their salary accounts. If the latter applies to you, you should consider the following factors before selecting.
Suppose there is a situation where your salary isn’t credited into your salary account for three consecutive months. In that case, your account will be converted to a regular savings account. This would mean that the services and benefits enjoyed would also convert from those associated with a salary account to those linked with a savings account.
On the flip side, if you join a company that holds salary accounts with a bank where you already hold a savings account, then the bank can convert your existing savings account into a salary account after obtaining a letter from the company.
Salary accounts benefit accountholders in several ways. That said, the precise advantages they offer may vary across different banks. If your employer offers to pay your salary via this account, you should consider availing of it. On the other hand, if you are an employer looking for a means to pay your employees their monthly salary, consider opening salary accounts at a reputed bank. Do so after comparing the services, benefits, and facilities they provide. The perks provided under salary accounts can go a long way in making your employees happy.
Fi offers its users various financial services to simplify finance as they save. You can visit the website or download the app to know more.
Consider the following benefits that help set apart salary accounts from savings accounts.
A salary account benefits the holder as it doesn’t require a minimum balance to be maintained, while savings accounts might require account holders to maintain a minimum balance.
Salary account holders get to enjoy several benefits that aren’t linked to any fees. In contrast, benefits offered under savings accounts are fewer and tend to be linked to fees.
There is no minimum balance linked to salary accounts. Owing to this very fact, they are called zero balance accounts.