What is a Salary Account?
A Salary Account is a type of bank account where your monthly salary is directly credited by your employer. It offers easy access to your money and includes benefits like zero balance and free banking services.
Here are more details about the Salary Account:
A salary bank account is one of the few things that employees receive from their employers for credit of monthly salary. Employees need to submit the duly filled application form along with other documents to the bank through an employer to open a salary account. These accounts simplify the process of depositing the monthly salary and offer multiple benefits and services.
The following are some of the primary differences between a salary account and a savings account:
Particular | Salary Account | Savings Account |
Main purpose | Credit of monthly salary | For savings of salary or fund |
Who can open | Only an employer | Any eligible individual |
Minimum balance requirement | Zero balance | Minimum balance should be maintained on monthly or quarterly basis |
Benefits | Offered to accountholders | Comes with a minimum fee attached to it |
There are multiple banks that offers salary account facility, some of the top salary accounts are IDFC First salary account, ICICI Bank salary account, Axis Bank salary account, Bank of Baroda salary account, PNB My Salary Account SBI Salary Account, etc.
Yes, there are multiple benefits of salary account, such as debit and credit cards, net banking facility, online fund transfer, demat account, zero balance, free cheque book and passbook, utility bill payment, etc.
Salary account is one type of savings account, and the rules of these accounts are that it can be opened by a business entity or employers where salary is credited on monthly basis.
Employers or a business entity can open salary account with a bank. In some cases, an individual can also open a salary account only after providing essential documents, such as employment proof from the company and others.
Yes, you can use your salary account for personal use, such as online fund transfer, deposit cash or cheque, withdraw funds, etc., apart from credit of monthly salary.
No, salary account is not tax free. The employer deducts the tax from your salary and pays it to the Income Tax Department and the total salary is credited to your account. In case the total interest earned on the savings of your salary account exceeds Rs.10,000, then tax would be deducted by the IT Department as per applicable rates.
There is no minimum balance requirement for maintaining salary account. Accountholder are offered with zero-balance facility on their salary account.
Yes, you can deposit Rs.5 lakh in your salary account as per the guidelines set by the Reserve Bank of India (RBI) that allows deposit of Rs.10 lakh annually. Any amount above this threshold limit will be scanned by the Income Tax Department and will be taxed as per the applicable rates.
Interest credited in your bank account of up to Rs.10,000 earned from all your savings account is tax free, under Section 80TTA of the Income Tax Act.
No, there is no interest applicable to the savings in the salary account, as the account is opened by the employer for the credit of monthly salary only.
Yes, the savings account can be converted to a salary account, if the bank in which the individual has his or her savings account permits them to convert the savings account to salary account.
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