When choosing a bank account, two common options are a salary account and a standard savings account. While both provide security and interest on your money, they differ in crucial aspects. Continue reading to know the differences between the two account variants to help identify the more suitable option.
Difference Between Salary Account and Savings Account
Salary accounts are targeted at salaried individuals for directly crediting their monthly pay. Savings accounts allow deposits by anyone looking to earn moderate interest.
Salary accounts provide unlimited free transactions, no minimum balance, a higher daily ATM withdrawal limit of up to Rs 1 lakh, and added benefits like a complimentary locker. Savings accounts have limited free transactions, a charge for the shortfall in the average quarterly balance.
Salary account holders enjoy preferential pricing on linked banking products like personal loans and credit cards. Savings accounts do not offer similar cross-sell benefits or relationship pricing.
How to Convert Savings Account to Salary Account
If you already have a savings account, follow this process to convert it into a salary account with your bank:
Step 1: Inform your employer to credit your monthly salary into the existing savings account
Step 2: Submit the account conversion request letter along with the latest salary slip and employee ID proof
Step 3: The Bank will evaluate the request and upgrade the savings account to a suitable salary account variant
Step 4: Start enjoying all the extra features and benefits applicable
Which Account Should You Choose?
Analyse your monthly banking and withdrawal habits. Salary account holders should evaluate privileges like unlimited free transactions, higher daily withdrawal limits and complimentary locker facilities to optimise account usage. High-volume transactors should leverage the free ATM transactions privilege to avoid recurring charges.
On the other hand, moderate users who wish to park savings or contingency funds can consider a no-frills savings account with lower minimum balance commitments. The interest payouts enhance returns on surplus funds while providing ATM access.
Most importantly, salary accounts necessitate stable job continuity for sustained utility. If you are likely to switch employers frequently, consider the hassles of shifting funds and resetting pay credentials. Savings accounts offer seamless, uninterrupted banking without such dependencies.
Conclusion
Salary bank accounts extend specialised conveniences and benefits tailored for working professionals receiving regular remuneration. Savings bank accounts allow hassle-free deposits and withdrawals while earning nominal interest on parked funds. Evaluate your usage patterns, job stability, and financial priorities to decide on the ideal account variant that aligns with your needs. Karnataka Bank Limited (KBL) offers award-winning salary and savings accounts with market-leading features, rates, and service standards to delight every customer segment.
