Every employed individual will have the working knowledge about what a Salary Account is. These are accounts which are opened by employers for the purpose of crediting the salary of their employees. Salary accounts for employees are usually opened with the same bank with which the company holds accounts and conducts banking transactions. On the other hand, you can open a Savings account with a bank of your preference where you can put money as and when is convenient and available. A salary account does come with its own set of advantages which are:
- Zero Balance Requirement – Salary accounts usually do not require the holder to maintain a minimum balance for the account to remain active.
- Free Drafts & Pay Orders – Salary accounts often provide account holders the facility of drafts and pay orders, free of charge.
- Freedom From Debit Card Charges – Debit cards offered with salary accounts usually come with a waiver of annual charges or issuance charges.
Following a job switch, a salary account automatically gets converted to a Savings account, if salary is not credited to the account for a period of 3 months. Though the agreement of a salary account lies between the bank and the account holder, but after conversion, salary accounts will no longer offer you the same benefits as before. So, if you are undergoing or about to undergo the process of converting your salary account to a savings account, here are a few things to remember which can be extremely helpful.
Salary Account & Your New Job
Before you convert your old salary account (held with a previous employer) to a savings account, do check with your new employer if they would allow you to continue holding on to your existing salary account. This is possible if the new organization too holds accounts with the same bank as your previous employer. If it is possible, it will save you a fair bit of paperwork which you’d have to submit in order to open a new salary account, and also one more account to manage.
Do You Need Another Savings Account?
In case your new employer does not have an account with the bank where you previously held your salary account, do give it some thought, whether or not you’d like to create an additional savings account of that salary account. Now, there are two ways to go about this. If your previous salary account was the first account you’ve ever held, then it is advisable to convert that salary account to a regular savings account. This way, you will have a savings account in addition to your existing salary account where you can get receive credits from other sources and make payments for your investments like Systematic Investment Plans (SIPs), EMIs for a loan or insurance which you may have taken.
Check For The Minimum Balance Requirements
Savings accounts usually require the holder to maintain a certain amount as minimum account balance. Your converted savings account may not be an exception. So, whenever you are converting a salary account with one bank to a regular savings account, do check beforehand the minimum balance which you will be required to maintain for that account. This is important because, banks do levy varying amounts , which may sometimes be quite high, as penalties for non-maintenance the required minimum balance in savings accounts. For instance, Axis Bank and ICICI require savings account holders in urban and metro areas to maintain a minimum balance of Rs 10,000. However, banks like Standard Chartered require account holders to maintain a minimum balance of Rs 25,000 for a savings account.
When it comes to banking, another factor which comes into play is your bank’s branch location. Though a majority of banking functions can now be done online via the internet or mobile banking, there are several other banking services which can be availed only at the branch location. There are many services that can only be availed at bank premises. This is why it is important to find out whether or not the bank you’re converting your salary account with has a branch nearby for easy access. Ideal locations would be near your office / workplace or your house, making it easily accessible.
Branch and ATM Density
One of the primary factors which influences our choice for a bank would be its accessibility. Before you consider to convert your old salary account with a particular bank to a savings account, do find out whether or not the bank has a robust and easily accessible branch as well as ATM network, not just near your house or workplace but also at places and areas which you might frequent. Banks like SBI, ICICI, PNB, HDFC, Kotak Mahindra and more have a wide spread network of branches and ATMs, making it easy for its customers to have access to banking facilities, especially in times of urgent need.
Remember To Change Your Communication Address
When it comes to salary accounts, more often than not, we provide our workplace address for bank related communication purposes. However, when you convert the same salary account to a savings one, the do always remember to change the address for communication as well. Otherwise, all information of your account related activity like monthly statements, credit / debit card bills to more sensitive information like internet banking / mobile banking passwords, debit/credit card PIN, cheque books, etc., will continue to be sent to your now ex office address and are at a risk of being misused. To prevent that from happening, do remember to change your mailing (snail mail and email) address once you have switched from one workplace to another.
- India Bank Holidays 2018
- Steps to Open SBI Savings Account
- Internet Banking
- How to Activate SBI SMS/Mobile Banking for the First Time
- SBI Quick – Missed Call Banking
- Steps to Open Punjab National Bank Savings Account
- Documents Required to Open Bank of Baroda Savings Account
- Steps to Open HDFC Bank Savings Account
- Best Zero-Balance Savings Account For Indian Citizens
- Converting Salary Account to Savings Account
- SBI Salary Account
- Steps to Open an ICICI Bank Savings Account
- SBI Savings Account For Minors
- BOB Immediate Payment Service (IMPS)
- SBI Basic Savings Bank Account
- Generating MPIN for Indian Overseas Bank Mobile Banking
- What is Inactive or Dormant Bank Account?
- Kotak 811
- ICICI Basic Savings Account
- HDFC Bank Salary Account
- Steps to Link Aadhaar card to Bank of Baroda Savings Account
- Union Bank of India Regular Savings Bank Account
- IRCTC eWallet
- Steps to Link Aadhaar Card to Bank of India Savings Account
- ICICI Bank Salary Account
- India’s Top 5 Mobile Banking Apps
- ICICI Bank Salary Account Advantages
- PNB SMS Banking Services
- Steps to Link Aadhaar card to Central Bank of India Savings Account
- Steps to Open Axis Bank Savings Account
- Axis Bank Salary Accounts
- FedBook Selfie Zero Balance Account
- Allahabad Bank Normal Savings Account
- Steps to Check Central Bank of India Account Balance
- Platinum Identity Chip Debit Card
- Steps to change SBI registered mobile number
- Steps to Use ICICI Bank Debit Card Internationally
- MyDesign Image Debit Card
- Debit Cards For Fuel
- How to Activate Axis Bank ATM Debit Card PIN
- Expressions Debit Card – ICICI Bank
- Smart Shopper Silver Debit Card – ICICI Bank
- Steps to Block PNB Debit Card
- Debit Cards For Online Shopping
- Steps to Check Indian Bank Account Balance
- Kotak Mahindra Platinum Debit Card
- Debit Cards For Movie Tickets
- Steps to Block Central Bank of India ATM Debit Card
- HDFC Bank Rewards Debit Card
- Steps to Apply for a Canara Bank ATM Debit Card
- Central Bank of India Platinum Debit Card
- Priority Platinum Debit Card - Axis Bank
- Debit Cards vs. Credit Cards
- SbiINTOUCH Tap & Go Debit Card
Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.