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What to do with your salary account once you leave the job

In our work life, most of us change a couple of jobs before settling down at one job. And with job changes, our bank account also changes. Different organisations have tie-ups with different banks, and as a result, you will be prompted to open a new bank account with the bank.

But once you leave the organisation, the salary account will cease to exist. If the salary is not credited for more than three months, the salary account will be converted to a regular savings account. All the other benefits associated with the salary account, such as a zero minimum balance requirement and offers will no longer continue.

After the salary account is converted to a savings account, you may have to keep a certain minimum average balance. If you are unable to keep the minimum balance, you have to pay the penalty as well.

Click here to read more about the differences between salary account and savings account.

So are you confused about what you should do with your salary account after you leave the company?

Here are the few steps that you can take in this regard:

What to do with your salary account_

Check if your new organisation will accept your old salary account

In a big corporate organisation or MNC, you have to switch your bank account. However, many organisations are okay with any savings bank account. These are mostly startups and companies that work out from a single city or a office. However, many big organisations have also started to accept other bank accounts as well.

So, before you do anything, look at whether your new organisation will accept your old savings account. If not, then we need to look at point #2.

Check if there are any existing SIP from your old account

Automating your finances is one of the best ways to grow your money. You have a couple of Systematic Investment Plans or a recurring account running in your old account. Changing the bank account of your SIP may not be an easy task. In this case, you can transfer the total SIP amount or RD amount from your new salary account to your old account.

You can use your old account as an investment savings account where you can transfer your existing investment amount or make any new investments.

The old account can be made into an emergency fund or a savings account for your splurges as well. If you already have an emergency corpus in place, you can use this account to park excess cash for your short term goals such as traveling, buying a new gadget, etc.

Read: 5 Differences between SIP and RD

Here’s how savings account can help you with your savings

Check the minimum average balance of your old salary account

One of the main differences between a salary account and saving account is the requirement of the average minimum balance. There is no average minimum balance in a salary account but regular savings accounts have a minimum average balance.

The minimum average balance of most banks varies from Rs.5,000 to Rs.10,000. If the average balance is Rs. 10,000 and you can maintain it, you can continue with your old account. If you use this account as an investment account, or for parking additional cash, the minimum average balance can be easily met.

Click here to know how the minimum average balance is calculated. If you are not using your old account, then it is better to close the account.

Look out for the charges

Besides the minimum average balance, regular savings account also carries other charges such as maintenance charges, charges on withdrawal from ATM after the free transactions are over. In case of a salary account, these charges are minimal or waived off. After the account is converted to a regular account, these charges come back. So, look at the ‘schedule of charges’ of your bank account. If the bank account has a lot of charges, then you can look at closing at your old account.

These were the four things that you can check after leaving a job and getting into a new organisation.

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