Salary Account VS. Savings Account: 5 Important differences to know

  • Published on: 18 Dec 2023
Salary Account VS. Savings Account: 5 Important differences to know

Knowing the varying features of a salary account vs a savings account helps you choose a feasible option. To begin with, a savings account is a financial product that helps you keep your money secure and earn nominal interest. 

On the contrary, a salary account is available only if you get a salary and your employer has partnered with the bank. Apart from this, knowing the other difference between a salary account and a savings account is pertinent in choosing the ideal option. 

Read on for more insights into a salary account vs a savings account. 

What is a Savings Account?

Most banks offer a savings account as a deposit account facility where you can park your funds and earn interest on it. Anyone can open this account, whether salaried or not. Moreover, individuals under 18 years of age can have a savings account which is under their parent or guardian’s ownership. 

What is a Salary Account?

A salary account is a type of dedicated savings account where employers directly deposit the employee’s salary. Generally, companies tie up with banks to open an account for their employees. This account requires zero minimum balance, and you earn interest.  

Also Read: 5 Best banks for savings accounts in India

Salary Account VS. Savings Account: Differences

Here are some crucial points of difference between a savings account and a salary account: 


When comparing a salary account vs a savings account, the main difference between them is their purpose. A salary account provides you with the facility of receiving your salary every month. In contrast, a savings bank account allows you to keep all your funds, whether from salary or otherwise. 

Minimum Balance 

A salary account generally does not have a minimum balance requirement, so you can withdraw your complete salary amount without any penalties. On the other hand, a savings account can have a minimum balance requirement, depending on your bank and the type of account you choose. If you don’t maintain the balance, you will have to pay a penalty. 


Another important to consider when comparing salary account vs a savings account is their interest. While the rates are generally the same, their calculation and compounding principles are different. However, this depends entirely on the bank and the type of account you have. 


Any individual can open a savings account by providing the necessary documents. However, only corporate employees can open a salary account, which is generally created by the employer. 


In case of no credit for more than three months, your salary account will automatically convert into a savings account. Thereafter, you must maintain the minimum balance requirement similar to a savings account. 

However, this does not happen if you have a savings account. But you can choose to convert a savings account into a salary account, provided your employer has a tie-up with the bank.

Similarities Between Salary and Savings Accounts

Now that you know the difference between a salary account and a savings account, here are the similarities between them.  

  • Convenience of opening an account at any bank with a simple process 
  • Banks offer passbooks, chequebooks, debit cards, digital fund transfer facilities, and other options 
  • You can opt for SMS and email alerts for your accounts 
  • There are multiple charges on your account, such as cash deposit and withdrawal
  • Most banks provide internet banking, phone banking, and mobile app facility
  • You can get your periodic account statement delivered through email 
  • Enjoy 24/7 banking and customer services, depending on the bank

Comparing the differences and similarities of a salary account vs a savings account helps you zero in on the best option. That said, if you require immediate funds to bridge monetary gaps, you can apply for Personal Loan to get hassle-free credit. 

You can get up to ₹5 lakhs at affordable interest rates, with minimum documentation, in just 2 minutes. With simple eligibility criteria and an entirely digital application process, you can get the funds you need effortlessly. Download the Personal Loan App or register on our website to apply in just a few clicks.

FAQs on Salary vs Savings Account

Can I put my salary in a savings account?

Yes, you can withdraw your salary from your salary account and transfer it to your savings account. 

Who can open a salary account?

An employer can open a salary account for all their employees if they have a tie-up with the bank.

Should we transfer money to a salary account?

If you deposit funds into your salary account, be it from another source of income or as a gift, then you must disclose it in your tax filing. Additionally, this is available depending on your bank.

What are the benefits of a salary account?

While it has many benefits, the primary benefit of a salary account over a savings account is that it has no minimum balance requirements.


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