Banks and different financial institutions offer several types of accounts that individuals can choose according to their preferences. One such account type is a salary account, a special savings account that people get when they get a job. It is crucial to learn and be aware of the details of such an account so that you can understand its benefits. 

What is Salary Account?

A salary account is a type of account an individual has when he becomes an employee. A salary account is a type of account offered by banks to employees, typically opened by an employer for salary disbursal. 

The employer of the account holder deposits his salary (a fixed amount) every month to that account. These accounts also come with a set of features like ATM cards, online fund transfers, personalised cheque books and more.

Salary accounts have several features that facilitate the seamless transfer of a fixed amount, such as an employee's monthly salary. Employers tend to have tie-ups with specific banks, which simplifies the process of transferring funds, making it accessible and convenient for both employers and employees. 

Salary Account Benefits​

Salary accounts come with several features and benefits, which include the following:

Zero Minimum Balance Requirement

• Salary accounts can be maintained with zero balance, meaning there's no requirement to maintain a minimum average monthly balance. 
• This helps salaried individuals manage cash flow without worrying about penalties for low balances.

Instant Credit of Salary

• Your salary is directly credited to your account on the salary date without any delays. 
• Some banks even provide early salary credit features for select corporations.

Complimentary Debit Card and Chequebook

• Most salary accounts come with a free debit card (often contactless) and a personalised chequebook. 
• The debit card can be used for ATM withdrawals, purchases, and online payments.

Easy Online and Mobile Banking

• Enjoy full access to internet banking and mobile banking services. 
• You can view your salary slips, download account statements, set up auto-debits for bills, and perform fund transfers (NEFT/IMPS/RTGS/UPI) from anywhere.

Phone Banking & 24x7 Customer Support

• Most banks provide dedicated phone banking services and 24/7 customer support for salary account holders, making it easy to manage your finances on the go.

Preferential Loan Offers

• Banks prefer salary account holders when offering loans (home, personal, auto). 
• You may get faster approvals, lower interest rates, minimal documentation, and pre-approved loan offers.

Insurance Coverage

• Many banks provide complimentary accidental death and disability insurance to salary account holders. 
• The coverage amount may vary by bank and account variant.

Investment and Wealth Services

• Salary accounts can be linked to demat and trading accounts, enabling you to invest in mutual funds, stocks, government bonds, and other financial instruments easily.

Rewards and Cashback Offers

• Banks often run promotional offers or tie-ups with brands. 
• Account holders can earn reward points or cashback on spending using their debit card on shopping, dining, travel, etc.

Unlimited ATM Withdrawals

• Some salary accounts allow unlimited free ATM transactions across all bank ATMs (not just the issuing bank), which is a value-added benefit for frequent cash users.

Account Continuity and Conversion

• Even if you leave your job, most banks offer an option to convert your salary account into a regular savings account without closing it, preserving your banking history.

How to Choose the Best Bank Salary Account?

Salary accounts can be of different types. These include a basic salary account, zero balance salary account, corporate salary account, government employee salary account and professional salary account. Each salary account comes with different features. You need to opt for the one that aligns with your preferences. For that, you must assess or consider a few factors, which include the following:

• If you wish to have a regular salary account with no maintenance fees or additional charges, along with some basic features like ATM cards, cheque books, etc.
• If you wish to have zero stress about maintaining a certain balance in your salary account.
• If you are a corporate employee who wishes to have facilities like salary overdraft, investment opportunities, etc.
• If you are a government employee who works under government departments or public sector undertakings.
• If you are a professional like a lawyer, doctor, engineer, or chartered accountant.

How to Open a Salary Account?

Salary accounts are usually created by employers whenever an employee joins their firms. These are opened as a part of their onboarding process, which involves the following steps:

• You will be provided with a form to create your salary account. Please fill out the form carefully and enter the required details. Your employer will submit this form to the bank on behalf of the employee.
• Submit all the required documents to your employer, which will also be submitted to the bank. These documents are needed to open your salary account.
• Now, the bank shall implement a verification process where all your submitted details and documents will be verified. After confirming the authentication of these details, your salary account will be created, providing you with the details to access your account.

Documents Required to Open Salary Account

Employers must submit a required set of documents to the bank to create employee salary accounts. Thus, as an employee, you must submit the following documents to your employer:

• A duly filled application form to open a salary account.
• Identity proof
• Address proof
• Aadhaar card
• PAN card
• Voter ID card
• Driving licence
• Passport
• Public Sector Units (PSUs) and/or NREGA Job Card
• An ID card which must be issued by the Central or State Government
• Appointment letter from the company (as proof of employment with the company)

Please note that, based on your application and company policies, additional requirements for bank documents can exist. Also, it is essential to note that ID cards issued by the company can not be regarded as proof of ID when opening a salary account. Whatever ID proof you submit should be issued by the central or State government.

Eligibility for Salary Account

Individuals who wish to opt for a salary account need to comply with the following eligibility criteria:

• You must be employed at a company tied up with the bank where you wish to have a salary account.
• You must have all the documents required to open your salary account (according to the type of salary account you wish to open).

Minimum Balance in Salary Account

A salary account usually does not require a minimum balance to be maintained. Thus, these accounts can be opened and maintained even with a zero balance. No penalties or fines are also charged for not keeping the account with a certain amount.

If you have any more questions about the minimum balance of your salary account, consider contacting your employer or the bank itself.

Best Bank for Salary Account​

While multiple banks offer salary accounts, each comes with different sets of requirements, features, and benefits in terms of interest rates. So given below are some of the best banks that draw most employers for their distinct features:

• RBL Bank salary account
• Kotak Mahindra Bank Platina salary account
• IDFC First corporate salary account
• Axis Bank salary account
• ICICI Bank salary account
• HDFC Bank salary account
• SBI salary account
• Bank of Baroda salary account
• Citibank Suvidha salary account
• Punjab National Bank Salary account
• UCO Suvidha Salary account

Please note that the banks and their salary accounts mentioned above may have different policies, features and salary account benefits. You need to choose one that perfectly aligns with your interests and preferences.

Bottom Line

A salary account is a specialised type specifically designed to streamline the process of disbursing employees' salaries. This type of account comes with several perks, including a zero balance feature, direct salary credits, and more. Understanding the features and other details of a salary account enables you to take an informed approach to managing your funds and transactions from the account.

Related Articles:
1. What is Savings Account?
2. What is Current Account?
3. Best Zero Balance Account Opening in India
4. How To Convert Saving Account To Salary Account?
5. Differences Between Salary Account And Savings Account