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Everything You Need To Know About Salary Accounts
Banks offer a wide range of services to their customers today. From internet and mobile banking to online savings account opening facilities, modern day banking has become truly convenient. In fact customers can choose from a wide range of savings, current and NRI bank accounts. Of these savings accounts are the most common and popular accounts – especially regular savings account. Another very common type of savings account is the salary bank account. Here’s everything you need to know about it.
What is a salary account?
As the name suggests, a salary account is an account in which you can park your monthly salary and the incentives and bonuses that are provided over and above the actual salary. These accounts are typically opened by employers when you join a new organisation and are reserved for parking your monthly income. This type of savings account is also regarded as a zero balance account because account holders are not mandated to maintain any minimum balance in this account.
Opening the account
Business owners or employers need to tie up with a bank of their choice to open an account for every employee. Typically, employers choose banks that provide a wide range of services that their employees can benefit from including internet banking facilities. The bank representative visits the office premises when a new employee is hired and assists with the salary account opening formality.
As the account holder, you are asked to fill the account opening form, and provide photocopies of documents such as PAN and Aadhaar Card. The bank representative then hands over an instant kit comprising of the cheque book, passbook and ATM-cum-debit card. The account is opened within a few days and you receive SMS notifications for the same. Typically, the account is opened before your first salary is deposited, so that you can access funds at the earliest.
What happens when employers don’t provide salary accounts?
In many cases, especially when the organisation consists only of a few employees, employers do not provide salary accounts. In that case, employers generally ask you to provide your regular savings account details and your salary is transferred in your regular account. As such, you do not get the benefits that come with salary account opening. However, you can still open a special, zero balance account to deposit your salary. You can ask your employer for the necessary details including your proof of employment letter and approach a bank to open the account. You can then pass on the details of your newly opened account to your employer to deposit your salary.
What happens when you end your association with your current employer?
There are two things you need to remember when you end your association with your employer
Your salary account is converted into a regular savings account, if no salary is deposited in it for three to six consecutive months, depending upon the bank offering the account. As such, the benefits associated with the account are suspended and replaced with regular savings account benefits.
If you join an organisation which has a tie-up with a bank in which you hold a savings or salary account, you can request the new employer or your bank to convert your regular account into a salary account.
Final Word: A few banks in India provide online saving account opening facilities. Since salary accounts are a type of savings accounts, you can check if you can also open your salary account online. You can fill the account opening form and attach photocopies of your documents to open the account.
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