Salary Account vs Savings Account

There are many types of bank accounts that you can hold namely savings, current, salary accounts, etc. If you are confused if you need to open a savings account or a salary account, read ahead to know their difference.

What is a Salary Account?

A salary account, as the name suggests, is a bank account where you receive your salary. It is usually opened at the request of major organizations which individuals can operate on their own. 

The organization also has an account in the same bank which makes the monthly salary crediting process easier.

What is a Savings Account?

A savings bank account is opened by an individual with the purpose of saving funds. It can be opened by both salaried and non-salaried people to manage their daily finances. 

A savings account can be of many types, and a salary account is also considered a type of savings bank account. 

Difference Between Salary Account and Savings Account

There are certain differences between a salary account and a savings account which makes them fit for different people. Take a look at the differences in short - 


Salary Account

Savings Account


Salary credits

Building savings

Minimum Balance Requirement

Not required

Required as per the rules of the bank


As per the bank

As per the bank


When salary is not credited for a specific number of months consecutively, it gets converted to a savings account

It can be converted into a salary account only if the bank permits

Account Opening

Can only be opened by organizations

Can be opened by an individual 

Now let us try to understand the difference between salary account and savings account in detail - 

The main difference between a salary account and a savings account lies in their purpose. 

A salary account is meant for salary credits by the employer. Banks have tie-ups with employers, who often have a bank account in the same bank. Whenever a new employee joins, the employer opens a salary account in the bank on their behalf.

Whereas a savings account is used to build funds and savings. Such bank accounts make it easier to track finances and use money for daily needs. 

Most private banks require you to maintain a minimum balance in savings accounts. In case your balance drops below the required minimum, the banks charge a penalty to you. 

However, in the case of a salary account, maintaining a minimum balance is not required. You can withdraw the total salary that you receive without bearing any penalty.

Both salary and savings accounts are interest-bearing accounts. The rate of interest that the bank will deposit will depend on factors like the amount of funds in your account, the type of bank account, and how long you let the funds stand in your account. 

A salary account can be easily converted to a savings bank account. In fact, if you do not receive your salary for consecutive months (mostly 3 months), banks automatically convert a salary account to a savings account.

Whereas converting a savings account to a salary account can only be done with the bank’s permission. It can be done if your employer has a banking relationship or a tie-up with the same bank where you already have a savings account. In such a case, the bank may permit conversion of your existing savings account to a salary account.

A salary account is opened in the bank with which the employer has an existing banking relationship. The salary account can be opened by the employee, or by the employer on behalf of the employee.

A savings account, on the other hand, can be opened by any individual in any bank they choose.

Similarities Between Salary Account vs Savings Account

Even though their purposes are very different, there are certain similarities between salary and savings accounts. They are listed below -


Both salary accounts and savings bank accounts are great options if you are a salaried person. Most salaried people prefer to have a separate savings account along with their salary accounts. 

If you are an individual, who is not on a monthly salary, a savings account would be a better option for you. To choose the bank that will be best for you, you can check out the top banks in India, the minimum balance requirements, and the interest rates they offer.

In the end, the choice of which bank account you should open comes down to your purpose of opening a bank account. Both bank accounts allow you to apply for loans as well. It is, however, easier to get a loan if you have a salary account. 

A savings account holder has to prove their creditworthiness through income proof and credit scores. If you have a low credit score and are in need of urgent funds, you can opt for instant personal loans from moneyview. 

Here, you can get loans from Rs.5,000 to Rs.10 Lakh with a CIBIL or Experian score of just 650. To check your eligibility or apply, you can visit our website or download the moneyview app. 

Salary Account vs Savings Account - Related FAQs

Yes, if you happen to have a savings account at the bank with which your employer has a tie-up, you can convert your savings account to a salary account. You will, however, need permission from the bank to do so.

As per the rules of most banks, if your salary is not credited in your salary account for 3 consecutive months, it gets converted to a savings account.

Even though both salary and savings accounts are good options, a salary account has some advantages. You do not need to maintain a minimum balance in a salary account and can withdraw your full salary. Savings accounts require you to maintain a minimum balance, and if you fail to do so, the bank will charge a penalty.

Yes, a salary account is taxable.

You do not have a choice regarding the bank in the case of a salary account. When you join an organization, they will open your salary account in the bank with which they have banking relations. All employees will have salary accounts with the same bank.

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