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Differences between salary and savings account

A salary account is opened by organisations to credit salary. It comes with its perks and benefits that are offered only to the salary account holders of the bank. The salary account becomes regular savings account after termination or resignation.

Many salary holders are confused between the different facets of a salary account and savings account.
Now, let us understand both these accounts in detail as well as the difference between the two bank accounts.

salary and savings account

What is a Salary Account?

As the name suggests, a salary account is primarily opened to credit your salary by your employer. The most prominent feature of this account is that there is no condition to maintain a minimum average balance. Therefore, it can also be called a zero balance account. Some banks in India offer different types of accounts based on your salary.

The amount held in this account may not be entitled to any interest. However, bank employees of certain banks may receive higher interest on their salary account.

Salary savings account come with better perks as well. Some of these facilities include a higher limit debit card/ credit card and better loan facilities.

The salary will continue to exist till the time you are an employee of that organization. If your income is not credited for three consecutive months, then the salary savings account will be converted to a regular savings account.

What is Savings Account?

A savings account is a basic financial service offered to the public at large. There are different types of savings account such as basic savings account, online savings account, zero balance account, and premium accounts.

Depending on the type of savings account, the average minimum balance requirement will vary across the spectrum. While basic savings account and zero balance account do not carry any minimum average balance, premium accounts have a minimum balance of Rs. 1 lakh or more. The benefits offered by the savings account will vary accordingly.

How is a salary account different from a savings account?

1. Minimum balance requirement:

One of the most prominent differences between salary and savings account is the average minimum balance. In a salary account, there is no need to maintain any minimum balance. While in a most savings account, account holders have to keep a minimum average balance on a monthly or quarterly basis. Failure to do so will attract a penalty.

2. Interest:

A standard savings account offers interest ranges according to the current interest rate scenario. It is paid quarterly while most salary accounts do note give any interest.

3. Opening of an account:

An employer creates a salary account for the employees to credit their monthly salaries. While any individual who wants to park money can open a savings account

4. Charges to maintain account:

There are no penalty charges for not maintaining a minimum average balance as there are none. On the other hand, in regular savings account a minimum balance has to be maintained. If you don’t comply with the minimum balance requirement, then the bank charges a penalty.

5. Other benefits

Salary account comes with different benefits as well. It is much easier to secure a loan through a salary account than a regular savings account as your salary is credited to your account every month.

Similarities between salary and savings account

Besides all these differences, salary and savings accounts have several similarities as well. Some of these facilities are:

• Passbook facility
• Alerts for transactions
• Net banking
• Phone banking
• No charges for ATM usage
• Electronic fund transfer
• 24/7 banking services
• Availability of chip cards
• Quick and easy account opening with minimalistic formalities


Salary account and savings account appear similar at a glance but they are a tad different. Usually, a salary account is opened by an employer to credit income while a savings bank account can be opened by everyone. It is essential for people who change their jobs frequently to know that their salary bank account would change to standard savings account if the salary is not credited for consecutive 3 months and minimum balance requirements would apply.


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