A salary bank account is one of the first things new hires of an organization get from their company. The employer transfers the employee’s monthly salary into this bank account. To start a paid account, the employer must submit a filled-out application form to the bank containing all the employee detail.
A salary account is one form of particular savings account employers find simple and convenient. Employees receive special services and perks when their salary gets credited.
Who is Eligible to Open a Salary Account?
A business (employer) has to partner with a bank to create a paid account for its employees. Each month, the employers make a lump sum payment of the employee’s salary into their separate bank accounts. If the employees’ don’t already have an account with the bank that their employers are partnered with the employer helps them create an account.
Requirements to Open a Salary Account
To open a salary account , you must first fulfill certain eligibility conditions. Those who qualify may start a Salary Account by-
– Submitting an application form that has been appropriately filled out and signed, as well as the paperwork needed for a salary account.
– Your employment offer letter, employment contract, and introduction letter from your business need to be in the Bank’s format and stamped and signed by an authorized signatory.
– Only those who make a minimum net monthly income of Rs. 10,000 are eligible for a Salary Account.
Benefits of a Salary Account-
While the features and advantages of pay accounts might differ between banks, the following are some of the more typical ones:
1) Zero Balance
A salary account is usually a zero-balance account. Account holders don’t need to be concerned about maintaining a balance over a threshold or paying fines. Paid employees have more financial freedom because of the zero balance feature.
2) Internet banking and online money transfers
With a salary account, account holders may transfer or receive money online from any global location. As a result, there is no need to withdraw cash or deposit checks to complete the financial transfer. Some banks now provide phone banking services, which let customers manage transactions while lounging at home.
3) A debit card plus a custom checkbook
Additionally, employees are given an ATM card that they may use to make online and offline debit card purchases and cash withdrawals from ATMs. Account holders also get customized checkbooks for making payments using checks.
4) An easy way to get loans
Additionally, banks provide rapid access to a variety of loans to owners of salary accounts. The paperwork procedure will be streamlined and accelerated if your payment account is in the same bank, regardless of whether you apply for a personal loan, auto loan, or mortgage. Even the interest rate is typically more affordable for those with an account.
5) Investment Services
The account holders may easily invest in mutual funds, government bonds, insurance products, and more through a salary bank account. A Demat account may also be connected to the salary account for stock investments and trading.
Modifying the accounts
Your account is automatically transformed from Regular Pay Account to a Regular Savings Account if your salary is not credited to the Salary Account for three consecutive months. All of the features and advantages of a salary account are replaced by those of a regular savings account.
On the other hand, if you already have savings account with a bank and join a firm that has a tie-up for salary accounts, the bank may convert your savings account into a salary account at your request.
Salary accounts are a super streamlined way for employers and employees to work with salaries. Many banks or financial service platforms reward employees using their salary accounts.
If you’re thinking of opening a salary account, It is essential for you to jump into your research beforehand. When you open a salary account via Fi.Money, not only are you rewarded each time you get paid but using your account gets easier. You can keep track of your spending patterns, save, invest, and pay all through the Fi.Money app. You can also connect multiple accounts to make it all more convenient for you.