A payroll account is a type of savings account opened by an organization to credit the salaries of its employees. Generally, banks open these accounts on behalf of employees at the request of companies and organizations. Payroll accounts come with various features and benefits, which can be availed by bank payroll account holders.
Many people tend to confuse a savings account and a payroll account. For a better understanding of our readers, we have discussed both types of accounts and the differences between these bank accounts in detail.
Table of Contents
What is a Payroll Account?
Payroll accounts are mostly opened by employers for their employees. This account is opened to credit the employee’s monthly salary at once. One of the most important features of a payroll account is that it is a zero balance account, so there is no requirement to maintain a minimum balance.
Several banks in India offer different salary accounts based on the account holder’s salary plate. While the amount accumulated in the account is not entitled to any interest, there are many other benefits offered under a payroll account.
What is a Savings Account?
A savings account is a basic financial service offered to the public. There are different types of savings accounts that an individual can open, such as online savings accounts, basic savings accounts, premium accounts and zero balance accounts.
Depending on the type of savings account, the account holder will need to maintain a minimum average balance in the account. In addition, the benefits offered by these accounts vary.
Difference between Payroll Account and Savings Account
Let’s take a look at the differences between the two accounts:
Theme | Salary Account | Saving account |
Destination | Salary account is opened by the company or organization to credit the salary of employees every month | Every individual can open a savings account with Aadhaar card to save and save money in the long term |
Minimum Balance Requirements | As this is a zero balance account, no minimum balance is required to maintain the account | It is mandatory to maintain a certain minimum balance amount in the account |
Interest rate | Most payroll accounts don’t pay any interest | Based on the current interest rate, interest on the accumulated amount is valid every three months |
Conversion | In the event that the salary is not credited to the account for 3 months, the bank changes the salary account to a regular savings account | In the event that the person already has a savings account at the bank where the company is bound, the employer asks the bank to convert it to a salary account. |
Who can open an account? | Payroll accounts can be opened by employers. To open a payroll account, the company must have ties to a bank | Any individual can open a savings bank account |
Similarities Between Payroll Account and Savings Account
While these are some of the differences between the two accounts, there are some similarities as well. Let’s see that-
- Both accounts offer passbook facilities
- Both payroll and savings accounts send alert notifications for transactions
- An individual can enjoy net banking benefits on both accounts
- Account holders can also use phone banking facilities for both accounts
- There are no fees charged for using the ATM
- Electronic fund transfer facility can be disbursed in both types of accounts
- Individuals can avail the benefits of 24/7 banking services
- Payroll accounts, as well as savings accounts, offer a fast and hassle-free account opening process with minimum formalities.
Benefits Offered by Paytm Payment Bank for Salary Accounts and Savings Accounts
Here are some of the benefits of having a payroll account by Paytm Payments Bank:
- Individuals can enjoy the convenience of banking on their mobile phone without any account fees or fees that apply to online transactions
- Payment bank Paytm offers account holders a free virtual debit card that can be used to make easy online transactions at favorite merchants around the world
- It offers the benefit of a passbook that is updated in real-time. Each individual can view transactions and balances in real-time in the Paytm passbook
- Paytm payment bank offers customers risk-free deposits
- One can secure their account with special Paytm passcode
Wrap it up!
While payroll accounts and savings accounts are considered more or less the same, they are slightly different. Generally, payroll accounts are opened by employers to credit salaries whereas savings accounts can be opened by any individual. Therefore, people who change jobs frequently should know the difference between the two types of accounts so as not to experience financial problems.
FAQ
Can payroll accounts have co-applicants?
Yes, a spouse, parent or child can be a co-applicant for an account. To add a nominee/beneficiary to your account, you must submit your name, date of birth (DOB), and proof of address to the bank.
Is employment confirmation mandatory to open a premium salary account?
Yes, employment confirmation is mandatory to open a premium salary account to ensure that you are an employee of the company.
If I change companies, can I use my existing payroll account?
Yes, if your existing company has ties to a bank where you already have a payroll account then you can use your existing payroll account. To use an existing account, you must send the account details to your employer.
Is there any interest that applies to payroll accounts?
No interest applies to payroll accounts.
Can I deposit cash into my payroll account?
Yes, you can deposit cash into your payroll account at any time. However, please note that if the monthly limit of ‘over the counter’ transactions made for the account exceeds a certain amount, a small fee may be charged.