There is a considerable difference between a salary account and a saving account that not many individuals are aware of. At first glance, you will find similar features. However, there are a few differences between both accounts, which extended to their features. They include the following:
Salary account: As the name suggests, the salary account is basically opened by an employer. It is mainly used to credit salaries to the account. One of the main benefits of the account is that there is no requirement to maintain any minimum balance. Some banks even offer different types of salary account, based on the salary you normally draw. In this case, however, the amount that is maintained in the account will not be entitled to theinterest rate. At the same time, your salary will need to be creditedto the account for a consecutive three months; else it will be automatically converted into a savings account. Automatically, you will need to maintain a minimum balance in the account. Some of the common facilities provided on this account include a debit and credit cards with a higher limit and beneficial offers on loans amongst many others.
Saving account: The saving account can be opened by any individual. The main purpose of the account is to encourage savings. Under this account, there are several types, based on the services you want. However, you will need to maintain a minimum balance in this account. Failure to maintain a minimum balance in the account will lead to a fee charge or penalty. However, this will depend on the type of account you have opted for and the bank you have opened your account in. You can also transfer your funds from the saving account to a salary account if your employer account is with the same bank. However, you need to ensure that your bank permits the same service. Through the saving accounts, you may be entitled to an easier loan, as well as other benefits such as banking cards. The reason behind this is that the bank has an assurance that the salary is being credited to their bank, and thus will have an assured flow of income.
While both accounts offer plenty of benefits and assets that can differ from person to person, along with their different financial needs. While a salary account will offer plenty of benefits to employees, especially to long-term employees, it will be a drawback to individuals who change their jobs frequently. Most employers offer a fresh saving account, when you join up, as they have better control of the finances and benefits offered by the company itself. However, if you switch your job, you automatically will stop using the account after some time. However, if you don’t maintain the appropriate balance in the account, you will be charged a fee, as mentioned previously.