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Salary Account vs Savings Account: What's The Best Choice For You?

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Created on
July 7, 2022


What’s Inside

With its intricate systems and ever-evolving services, banking holds immense importance in our lives. It's played this role since the Templar Knights introduced modern banking in the 12th Century during the Crusades. But the financial realm can be overwhelming. It's one of the reasons why this blog delves into the differences between Salary Accounts vs Savings Accounts.

What is a Salary Account?

A Salary Account is an account opened by an employing organisation with a registered banking institution to facilitate a seamless employee salary disbursal system.

What is a Savings Account?

A Savings Account is an interest-serving deposit account — held at a bank or financial institution. Though these accounts typically pay an acceptable interest rate, their safety and reliability make them an excellent option for parking cash.

How do Savings Accounts Work?

Savings, and other deposit accounts, are important sources of funds that financial institutions use to give out loans. So, you can find savings accounts at virtually every bank, whether they are traditional brick-and-mortar institutions or operate exclusively online. Some savings accounts require a minimum balance to avoid monthly fees, while others have no balance prerequisite.

Pros & Cons of a Savings Account


  • Fast and easy to set up and move money to and from
  • It can be easily linked to your primary current account
  • Up to your full balance can be withdrawn at any time


  • Pays less interest than you can earn with certificates of deposit, Treasury bills, or investments
  • Easy access can make frequent withdrawals appealing
  • Some savings accounts require minimum balances 

Difference between Salary Account and Savings Account


Salary Account

Savings Account

Who can open



Purpose of account

To Pay Salary

For Saving Money

Minimum Balance Requirement

No Minimum Balance Required

Minimum Balance Required

Interest Rates

Current average - 

3% p.a - 3.50% p.a 

2.70% p.a. to 6.50% p.a.*



If salary is not credited for 3 months, then salary account turns into a savings account

If the bank allows then a savings account can convert into a salary account

Debit Card



Other Services

Mobile Banking, Net Banking, Cash Withdraw at any ATMs, Free SMS Alerts, Passbook facility, Cheque Book Facility, Fund Transfer Via NEFT/RTGS, etc.

Mobile Banking, Net Banking, Cash Withdraw at any ATMs, Free SMS Alerts, Passbook facility, Cheque Book Facility, Fund Transfer Via NEFT/RTGS, etc.


So, what's better — Salary a/c or Savings a/c? Both salary and savings account present equitable merits. However, suppose your salary account gets converted to a savings account due to non-closure. In that case, banks may charge a maintenance fee or a penalty for not maintaining a minimum balance.

At the same time, if you have a savings account in a bank and your employer also has a tie-up with the same bank, your regular savings account can be converted into a salary account.

We recommend keeping separate salary and saving accounts to help manage your money better. Paying your fixed and variable expenses from a savings account will help you organise your finances.

Online Salary Account Via The Fi App

Fi, and its licensed partner Federal Bank, provide a Salary Program with many benefits.

  • Yearly benefits worth up to ₹30,000 
  • Free 2x health insurance top-up up to ₹20 lakhs
  • Access to Instant Salary 
  • 2% cashback on Debit Card and UPI spends 
  • Free Debit Card 
  • 0 Forex markup
  • Priority customer support 
  • 0 penalties for not maintaining a minimum balance 
  • Joining vouchers worth ₹500
  • Exclusive vouchers every month

Frequently Asked Questions

1. What is the advantage of a salary account?

No minimum balance is required for a salary account

Most banks that offer this without a debit card fee, free net banking, mobile banking with multiple transactions, etc., cashback and discounts on shopping using a salary debit card

2. Can we convert a regular savings account into a salary savings account?

You can easily convert your savings account into a salary account. You may need to write to your HR administrator about it officially, but once bank details get shared on record — it should be an easy switch from the next salary cycle.

3. Are savings and salary accounts the same?

No, savings and salary accounts are not the same. A savings account is a type of bank account that allows you to deposit and withdraw money while earning interest on your balance. On the other hand, a salary account is a type of bank account that is used by employers to pay their employees' salaries. Salary accounts usually offer additional benefits such as zero balance requirements, free debit cards, and higher transaction limits.


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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