A payroll account is a special type of savings account offered to salaried customers. This is a convenient way to pay the employee a monthly salary from the employer. Having a payroll account makes it easy for employers and provides unique services and benefits to employees. In addition, employees can have seamless access to state-of-the-art mobile banking and net banking services.
To help you know more about payroll accounts, we have discussed its various aspects in detail.
Who Can Open a Payroll Account?
An organization (employer) must tie up with a bank to open a payroll account for its employees. The salary is transferred to the bank account of each employee per month as a lump sum by the employer. If the employee does not have an account at a bank that works with their employer, the employer assists the employee in the process of opening an account at their respective bank.
Thus, each individual can open a payroll account. One of the criteria for doing so is the bond between the organization and the bank.
Salary Account Benefits
Let’s take a look at the benefits of having a payroll account-
1. Compared to savings accounts, payroll accounts offer more benefits
2. Payroll accounts are more profitable for the bank because they receive a fixed amount of money per month. This makes it a constant source of checking and savings accounts (CASA).
3. The benefits offered by these accounts may vary from bank to bank.
4. One can take advantage of the benefits of zero minimum balance in the account, free passbook/checkbook/e-statement, debit card.
5. Payroll account holders can also benefit from unlimited phone banking services, clean banking and advanced online fund transfers.
6. With a payroll account, individuals can benefit from Demat accounts/services, easy loans, credit cards, etc.
7. You can also make electricity bill payments through a payroll account.
Difference between Payroll Account and Savings Account
Although a payroll account is a type of savings account, there are certain differences between the two. Let’s see them-
|Salary Account||Saving account|
|Only the employer can open a payroll account||Any eligible individual can open a savings account|
|This is a zero balance account||One needs to maintain a minimum balance every month/quarterly|
|More benefits offered to account holders||The benefits offered generally have an attached fee|
|Main goal- monthly salary credit||Main goal- encourage savings|
Benefits Offered by Paytm Salary Accounts
Paytm payment bank offers corporate payroll accounts with no account opening fees or minimum balance requirements. Let’s have a look at the benefits that Paytm payroll accounts offer-
- Offers a hassle-free process and fast employee orientation with instant account opening.
- Provides lifetime free account benefits to employees.
- No account opening fees apply.
- Employees can enjoy the benefits of free transactions and no minimum balance.
- Employees can enjoy free virtual and physical debit cards.
- Employees can earn up to 6% interest which applies to fixed deposits
In the event that the salary is not credited to the payroll account for three consecutive months, the employee’s permanent salary account is changed to an ordinary savings account. Thus, all benefits and perks associated with the same account are converted into a regular savings account.
In contrast to this, if a person joins an organization with a payroll account linked to a bank in which he or she already has a savings account, then the organization asks the bank to convert it to a payroll account.
Along with a monthly salary that is credited into the account, individuals can use the account to deposit cash or check it, withdraw funds, or transfer funds to and from the account.
Wrap it up!
Although a payroll account is a type of savings account, several features and benefits make it advantageous compared to a savings account. So make sure you compare the features and benefits of the two accounts and convert or close the account accordingly.
Is the payroll account a zero balance account?
Yes, the payroll account is a zero balance account. This means that any salaried individual can open an account with zero balance.
Is it safe to keep money in a payroll account?
It’s safe to keep money in a payroll account. One can use the account for all monthly expenses and savings. Paytm payment bank offers individuals the advantage of free transactions.
Can I convert my savings account to a payroll account?
If the bank where a person has a savings account allows, that person can convert their savings account to a payroll account.
Is the payroll account a real account?
These are expense accounts and nominal accounts.
Is there any interest that applies to savings in a payroll account?
Since a payroll account is opened by the employer to credit employee salaries, no interest rate applies to the amount held in the account.