GUIDESMONEY MATTERS
Handbook to know your Salary Account Better
10 MIN • 
LAST EDITED BY ANOOP MENON ON NOVEMBER 17, 2025.
LAST EDITED BY ANOOP MENON ON NOVEMBER 17, 2025.
GUIDES LAST EDITED BY ANOOP MENON ON NOVEMBER 17, 2025.
“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 in this detailed blog.
A Salary account, by definition, is a form of savings account through which corporations or companies pay their employees' salaries each month. It simplifies things for the company and provides other benefits to the employee.
Now that you know what is a salary account, let’s understand the eligibility for a salary account. If you do not have a bank account with which your employer has a partnership, your employer can help you get one. Some banks ask applicants to submit an introduction from the firm in the format specified by the bank (stamped and signed by the authorised signatory). Furthermore, the monthly minimum net salary band differs by the bank. This also varies depending on the type of salary account the relevant bank provides.
To open a salary account, employees require the following documents:
There are multiple aspects of how a salary account operates, below are the 5 essential ones:
Below are the top 5 salary account benefits and features:
Apart from seamlessly depositing your salary in your account, one of the primary benefits you get is that a salary account has no minimum balance requirement. Thus, you avoid paying penalties incurred due low balance on a regular account.
Today’s on-the-go generation has no time to stand in long bank queues. A zero-balance salary account gives you an entirely digital banking experience. Access your account through a web portal or a mobile app, transfer money, pay bills, and enjoy other services without lags or delays.
Apart from the ability to send and receive money online, you also get a physical ATM card to withdraw cash from partner bank ATMs or make it online/offline when the need arises. Furthermore, a personalised chequebook is also provided for making cheque-based payments.
You can put your money to work by availing of one of many investment services that your salary account can offer. Direct investment in mutual funds or government bonds or linking your salary account with a demat account for trading in shares – are just some avenues through which you can build long-term wealth.
Salary account holders can access several loans from their banks. Further, if you already have a salary account with a bank, the documentation needed to avail of a loan with the same bank is reduced, making the process faster and simpler. Existing account holders tend to enjoy more competitive interest rates in comparison to those that don’t hold accounts with the concerned bank.
While you’re exploring salary accounts, here are some helpful calculators for you when you’re understanding your pay and salary structure:
Although a salary account is a savings account, the two differ. Let's have a broad look at some of them:
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.
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:
The salary you receive is income for you while being an expense for the employer. Using a salary account can benefit you in more ways than one and help you receive your monthly dues promptly. It is equally beneficial to your employer as well.
A salary account is a bank account specifically designed to receive a person's salary from their employer. These accounts often have features like low or zero minimum balance requirements, unique benefits, and reduced fees.
A salary account is primarily for receiving your salary with low or no minimum balance requirements and special benefits. A regular savings account is for general saving and may have higher minimum balance requirements and standard fees.
Usually, a salary account needs to be facilitated by your employer through their tie-up with a specific bank. You may not be able to open a salary account independently. However, you can convert your salary account into a regular savings account with the same bank after you leave your job or if your employer no longer provides this service.
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.
A typical salary account may fetch you an interest rate of 3-6% p.a. and may vary from bank to bank.
Charges associated with a salary account can vary depending on the bank and the specific terms of the account. It's essential to read the terms and conditions of the bank offering the salary account to understand the specific charges that may apply. Many banks offer special fee waivers and benefits to salary account holders as part of their employment relationship with their employer.
When you change jobs, your salary account is typically converted into a regular savings account if any salary is not credited within 3 months. If your new company has a tie-up with the bank where you already have a salary account, you can continue to use it as a salary account.
You can open a salary account on your own and send in a formal request to the employer for its validation and salary direct deposit.
No, salary accounts aren't tax-free. Salary accounts are used to deposit salaries, and if your salary is in a taxable bracket, you will have to pay income tax.
