People who work in organised sector mostly have a salary account, where they receive their pay. In most cases, company makes it necessary to open this account. The subject of how salary accounts and savings accounts differ from one another and what those differences are now becomes relevant. Here we are explaining the distinctions between a salary account and a savings account as well as the advantages of each.
Difference between a salary account and a savings account
The opening of a salary account is requested by businesses. Each employee of the company has an own wage account. Each employee opens a personal salary account in which his or her salary is credited each month. If a salary is not deposited into the salary account for a defined period, it is transferred to the general account.
On the other hand, any individual may start a savings account. People who do not get a salary typically open a savings account to manage their daily finances. From this, they receive a deposit account that pays interest.
Benefits you get with a savings account:
- On their savings accounts, some public and private banks offer life insurance coverage, including coverage for air accidents. While some banks charge very little for it, others give it away for free.
- Your bank has agreed to cover up to Rs 5 lakh of your capital deposit. This covers fixed deposits, savings accounts, and current accounts.
- Many banks allow customers with savings accounts unlimited access to ATMs. However, a lot of other banks only make this service available to their most expensive clients.
- Typically, customers with regular savings accounts are only permitted to withdraw up to Rs 10,000 from ATMs of other banks and Rs 25,000 from their own banks. Owners of premium savings accounts may withdraw up to Rs 1 lakh each day, though.
- Holders of Premium Savings accounts are given free access to airport lounges by banks.
Benefits of Salary Accounts:
One will get almost all the benefits of a savings account. Apart from that, following additional benefits are offered on a salary account.
- Maintaining a minimum balance in a salary account is often not required.
- You also receive a personal chequebook along with the salary account.
- Salary accounts with a maturity of at least two years are eligible for an overdraft facility. The maximum overdraft amount is equal to two months’ worth of pay. Even if your bank account has no balance, you are still permitted to withdraw funds up to a specified amount under the overdraft facility.
- Personal accident insurance is available up to Rs 20 lakh in the event of the salary account holder’s death.