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Most individuals usually have a savings account with a bank, and anyone can open a savings account with the necessary identification and documents. On the contrary, not everyone can open a salary account. Salary accounts are reserved for individuals who are employed and receive their monthly salary through this account. The main difference is that a bank opens a salary account at the request of a company or corporation, and the employer deposits salaries into this account before distributing them to employees.
Can be used as an account:
A savings account can be opened by any person in any bank and it is generally used for the purpose of saving or depositing money. However, a salary account is not opened by the account holder himself; It is started by the employer to facilitate salary payment. The funds in the salary account are generally not for long-term savings but for the distribution of monthly salaries to employees. Some banks, such as HDFC Bank, offer the option to convert both savings and salary accounts into Insta Savings accounts, which can be used like regular savings accounts without maintaining a minimum balance for a year.
Interest Rates:
Both bank savings accounts and salary accounts offer interest rates on deposits. They may vary from bank to bank and may vary over time. If a salary account does not receive salary credit for three consecutive months, it is often converted to a savings account. The account holder is then required to maintain a minimum balance in the account. If someone wants to convert his savings account back to a salary account, he usually has to submit a formal application to the bank. However, banks usually allow changing account types when a person changes jobs. In terms of interest rates, both savings and salary accounts can offer interest on deposits, but the rates may differ.
