How a Separate Salary Account Can Benefit You?
You know how useful a salary account can be if you are a paid employee. Remember when you had to physically go to the bank to deposit your paycheck or cash? Those days are long gone. Most organisations transfer your salary straight into your bank account.
This has resulted in the establishment of a new form of savings account known as a salary account, which simplifies the entire procedure even more.
If you’ve started your career recently, you may not know what a salary account is, how to find the best bank for a salary account in India, and why you need to keep it separate from your savings account. Keep reading to learn all these details about salary accounts. However, let’s begin with clearing the concept of a savings account.
What is a Savings Account?
A savings account is a sort of bank account in which you may deposit and hold funds while receiving interest. It’s an excellent approach to saving money for long-term objectives or emergencies.
Some banks may impose a minimum balance requirement to keep the savings account open. Overall, a savings account is a smart financial tool for anybody trying to save money while keeping it safe and accessible.
What is a Salary Account?
A salary account is a sort of savings account that employees utilise to collect their paychecks. Corporations generally open these accounts through banks to credit salaries to their employees. Salary accounts, unlike conventional savings accounts, have no minimum balance requirement.
Furthermore, several banks provide additional ATM cash withdrawal limits and reward points to you for holding a salary account with them.
When looking for the best bank for a salary account, examine its customer service, reputation, and special perks it can provide you as a salary account user. Researching and comparing different banks’ products might assist you and your organisation locate the right bank.
What are the Advantages of Separate Savings and Salary Accounts?
Keep your salary and savings accounts separate if you want to develop good money habits. This is a proven method with several advantages. Here are a few examples:
- Organised Finance
You may keep things incredibly organised by paying your fixed and variable costs from your savings account. The good news is that banks today provide a variety of accessible services, such as internet banking, mobile banking, and UPI, to make financial transactions easier.
Try paying your power bills and EMIs from your savings account if you want to simplify things. Otherwise, controlling all of your expenses from your salary account might be difficult.
- Targeted Savings
Consider opening a separate account for your expenses if you want to keep track of your spending and save more money each month. This will enable you to track where your money is going quickly and will assist you in sticking to a monthly budget. You may ensure that you only spend what you need by moving the required amounts from your salary account to your savings account.
Furthermore, limiting withdrawals from your salary account might encourage you to save more. In the event of an emergency, you may immediately check your balance and transfer payments via digital banking.
- Additional Interest Earnings
Did you know that certain banks provide a lower interest rate on salary accounts? If this is the case with your bank, moving your funds to a high-interest savings account is an excellent strategy to maximise your interest returns. And, if you still have money left over after paying your bills, investing might be a wise decision.
This way, you may earn even more interest while still having access to your money. Furthermore, with FinTech companies, you have various tools to assist you in building your wealth to achieve your financial aims.
- Extra Benefits & Rewards
If you are lucky to get hold of one of the best salary accounts, they offer several benefits. You can receive cashback and incentives when you use your debit or credit card, UPI, mobile, or internet banking. Moreover, your separate savings account may provide other incentives and bonuses for different sorts of transactions, especially in a separate bank.
Let’s say the debit card of your salary account may provide 10% cashback on purchasing mobile phones from Amazon or other e-commerce sites. At the same time, your savings account may provide 5% cash back on apparel shopping. Thus, you may save a large amount of money each month by making wise purchasing decisions.
Finally, keeping your savings and salary account separate might provide several benefits to your financial health. If you keep your income and savings separate, you may better manage your spending, save more effectively, and avoid dipping into your savings for day-to-day needs. Separating your wages and savings is ultimately a wise decision because it may help you reach your financial objectives and develop a more robust financial foundation.