Wondering how to convert a Savings account into a salary account and how to get the benefits of a Salary account? You’ve landed at the right place. If you’ve started a new job or your company just changed banks, you might need a salary account. It’s simpler things to do. This guide will help you understand everything.
Understanding Salary Accounts
A salary account is where your employer puts your monthly salary or wage. It’s special or distinctive because banks offer better deals or benefits than regular savings accounts to their customers. These benefits include no minimum balance and a higher transaction limit.
Salary accounts are made for people who are employed. They come with extra benefits because of regular salary deposits.
Salary Account: Benefits for Employees
- Purpose: The main function is to receive a monthly salary credit from the employer.
- Zero Balance: no minimum balance required (e.g., 90% of active salary accounts are zero-balance).
- Overdraft Facility: often double or triple the net monthly salary (e.g., HDFC Bank offers up to ₹10 lakhs overdraft facility).
- Waivers & Discounts: Free unlimited ATM transactions, free checkbooks, lower charges on NEFT/RTGS, and discount rates on locker rentals (approx. 10-25% discount).
- Employer Linkage: Requires the employer’s partnership with the bank for direct salary credit.
What You Need to Know Before Starting the Conversion:
Before starting, as an employee, you need some important documents:
- An official letter from your company or department stating that they will deposit your salary into this account. Instead of this, you can also take with you the Salary Slip, which you can download from your company’s HRMS portal.
- Employment proof, such as your employee ID card or appointment letter, or joining letter.
- Your current savings account details (account number, IFSC, branch details, etc.)
Step-by-Step Conversion Process:
Step 1: Connect to your Human Resource Department either online or offline
Tell your employer you want to use your savings account for salary deposits. Share your account details like the number, the bank’s IFSC code, and the branch.
Step 2: Get Required Paperwork Ready
Your employer needs to ask your bank to convert your account. Make sure you have
- Salary Slip confirming salary deposits to your account.
- Valid employment proof or ID card.
- Complete savings account details.
Step 3: Visit Your Bank Branch
Go to your savings account branch. Give the bank your documents and ask for the account type change. They might need more forms from you, and you need to fill out a form application to get your salary accounts.
You need to attach all the important documents in the application form.
Step 4: Wait for Bank Verification
The bank will check your information and confirm it with your employer. This step makes sure everything is correct before changing your account. They are just verifying the documents.
Step 5: Confirmation from the bank
After successful approval from the bank manager, they will tell you it’s done via text or email. You will also get notified through SMS or Post at your domicile address. Check your account to see the changes, like no minimum balance rules.
Why account conversion to a Salary Account is necessary for the employee?
No Minimum Balance required: A Salary account doesn’t require a minimum balance. This means you won’t get charged for not meeting the zero balance rule.
Better Banking Benefits: You get special offers on loans, credit cards, and other banking services that regular account holders don’t get. You can also get locker benefits at a discounted rate.
Higher Transaction Freedom: You can make many more withdrawals and transactions limit than with a regular savings account.
Important Things to Keep in Mind:
Account May Change Back: If your salary doesn’t get credited into the account for more than 2-3 months, it might turn your account back into a regular account.
Company Cooperation is Key: Your employer’s help is crucial for the conversion. Without it, you might face significant delays. For example, if you don’t have a salary slip, then it’s very problematic to get your salary account.
Know Your Own Bank Account’s Rules: Each bank has its own set of rules for salary accounts. Ask your bank about its specific rules to avoid surprises accordingly.
From the above basic guide, you now know switching your savings account to a salary account is a very easy task to do and offers great financial perks and discounts. Just follow these simple steps and keep your documents in order. This way, you’ll have a smooth conversion and a better banking experience.
The most important thing is to be well-prepared. Make sure to communicate clearly with your employer and your bank. This will help you avoid any hiccups along the way of conversion.
Thank You Finolysis for helping to convert my bank account. you make me understand the process in very simple manner.
Cheers 🥂