Difference between Salary Account and Savings Account Explained

When your salary account is not credited for a few months (usually three months), it is automatically converted into a regular savings account. After this, you may require to maintain some balance to keep the account active. A savings account is a type of bank account for the public where you can deposit money and earn interest on your balance. It is ideal for people who may not be salaried and wish to generate interest on their deposit account. Savings accounts are typically used for long-term storage of money, as they typically have restrictions on the number of withdrawals or transfers you can make in a given period of time.

• When you join an organization, they will open your salary account in the bank with which they have banking relations.
• The interest rate can vary between banks and even different types of salary/savings accounts offered by the same bank.
• The salary account and savings account interest rate is generally the same in most banks.
• The salary account vs savings account explanation shows that choosing one among them depends on the need and requirements of an individual.
• Failure to maintain the adequate minimum balance may attract penalties.
• This keeps you informed and adds a layer of security, notifying you of any unexpected or unauthorised activity.
• You are therefore advised to obtain your own applicable legal, accounting, tax or other professional advice or facilities before taking or considering an investment or financial decision.

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What happens if my salary isn’t credited for 3 months?

While you can receive your salary in a savings account, it is not specifically designed for this purpose. Salary accounts offer features tailored to regular salary credits, such as higher transaction limits and overdraft facilities, which a typical savings account may lack. Personal finance includes managing money, which entails using a variety of financial terms and tools. Salary and savings accounts are two concepts that are frequently used in the world of personal finance.

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• Upon any change, the updated Terms of Use will be updated on the Website or any other means.
• Alternatively, you can also have both of these accounts for effective financial management.
• There are various types of Savings Accounts available, including basic Savings Accounts, premium accounts, and online Savings Accounts.
• This Agreement describes the terms governing the usage of the facilities provided to you on the Website.
• You get a small percentage of your account balance as interest, and the frequency can be on a monthly or quarterly basis.

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However, most banks now offer many different types of salary and savings accounts to meet the customers’ banking needs better. The interest rate can vary between banks and even different types of salary/savings accounts offered by the same bank. It is a specialised bank account provided by employers to employees to deposit their monthly salary. Banks often partner with different companies to open salary accounts for their employees. It serves as a channel for receiving regular salary payments and facilitates various financial transactions, like fund transfers, bill payments, and withdrawals. The salaried individuals are the customers who move between the salary and savings accounts.

Difference between Salary Account and Savings Account

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Savings Account & Salary Account – What’s the Difference?

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No fee of whatsoever nature is to be charged for the use of this Website. Although the two accounts may look similar, there are several notable differences to help you decide which suits you the best. If you are already employed, your salary may be credited directly into your Salary Account. Even so, it is better to open a Savings Account as well, since it enables you to park your savings, create Fixed Deposits, earn reward points and cashback, and more. A reliable savings account gives you a secure location to save your money while it also generates interest.

Ensure that you thoroughly compare the interest rate and other features before choosing a bank for your account. These Terms and Conditions are governed by and to be interpreted in accordance with laws of India, without regard to the choice or conflicts of law provisions of any jurisdiction. The Website specifically prohibits you from usage of any of its facilities in any countries or jurisdictions that do not corroborate to all stipulations of these Terms of Use. In case of any dispute, either judicial or quasi-judicial, the same will be subject to the laws of India, with the courts in Mumbai having exclusive jurisdiction.

In the case of a salary account, the account is automatically converted into a regular savings account if no salary is credited for a certain period (generally 3 months). Once the account is converted into a regular savings account, the account holder will then be required to maintain the minimum balance as salary account vs savings account per the terms and conditions of the bank. In summary, when comparing salary accounts vs savings accounts, it becomes evident that while both serve as financial tools, they have distinct features and purposes. Understanding these differences allows you to make informed decisions that align with your financial needs and goals. Information on this Website sourced from experts or third party service providers, which may also include reference to any ABCL Affiliate.

While the rates are generally the same, their calculation and compounding principles are different. However, this depends entirely on the bank and the type of account you have. On the contrary, a salary account is available only if you get a salary and your employer has partnered with the bank. Apart from this, knowing the other difference between a salary account and a savings account is pertinent in choosing the ideal option. A savings bank account is opened by an individual with the purpose of saving funds. It can be opened by both salaried and non-salaried people to manage their daily finances.