Difference Between Salary Account and Savings Account
28 Dec 2021

Difference Between Salary Account and Savings Account

Salary account vs savings account – Find out which one suits your needs.

Key Takeaways

  • Although savings and salary accounts operate similarly, there are a few differences between the two.
  • Salary accounts are opened for employees by their employers, whereas you have to open your savings account on your own.
  • Salary accounts offer the zero balance maintenance facility, whereas you have to fulfil the minimum balance requirement as by your bank.
  • Non-operational salary accounts are auto-converted to savings accounts.
  • Salary accounts are individual accounts, whereas savings accounts may be joint accounts.


Most of us have two types of accounts – a salary account and a savings account. In more ways than one, these accounts appear to be the same. You get more or less the same benefits with these accounts, be it a free cheque book, a debit card, internet banking facilities and more. And yet, there are some profound differences between salary accounts and savings accounts. Let us find out what they are in this article.

Salary Account Vs Savings Account – Understanding the Differences

Let us first define salary accounts vs savings accounts.

Salary Account

A salary account is one opened by an employer to credit your salary. Typically when you join an organisation, your employer provides you with a new account in which your salary, bonuses, and financial incentives are credited each month. This account is also known as a zero balance account, as you are not obligated to maintain minimum balances.

Savings account

A savings account is a regular account that you can create with a bank of your choice. It is typically the first account you open to manage your finances and park your savings. There are different savings accounts like a basic savings account, premium accounts and online savings account. You have to maintain a minimum balance as specified by your bank in this account. You also earn interest on the savings parked in the account.

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Salary account vs savings account – comparing the differences

Comparison Factors

Savings Account

Salary Account


To deposit savings and hold a bank account

To enable employers to deposit your fixed monthly income

Minimum Balance Required

Maintaining a minimum balance is mandatory. The amount differs from bank to bank.

Not required – you can withdraw all the funds from this account.


Possible to convert to Salary Account if your employer has an existing relationship with the bank with which you have a Savings Account.

It is converted to Savings Account if no salary is credited in the Salary Account for three consecutive months.

Account Opening

You can open an account in any bank of your choice

Your employer partners up with a specific bank organisation-wide and you cannot choose the bank.

Account Holding and operations

Can be held and operated individually or jointly with others

Can be held and operated by individuals only. There is no provision for joint salary accounts.

Let us now take a closer look at the differences between salary accounts and savings accounts.


Both savings and salary accounts serve different purposes. A savings account helps you manage your finances by holding or parking money. A salary account is used as a means by your employer to credit your salaries.

Minimum balance

Salary accounts do not have the requirement to maintain a minimum balance; this is why they are also referred to as zero balance accounts. On the other hand, banks require you to maintain a specific minimum balance in your savings accounts. Failure to maintain the adequate minimum balance may attract penalties.


If there are no transactions in your salary account for whatever reasons for three consecutive months, the account gets converted into a savings account. You will then have to comply with the minimum balance requirement associated with savings accounts. There is no conversion due to the non-usage of savings accounts. However, suppose you wish to convert your savings account to a salary account. In that case, it can be done, provided your new employer has an existing banking relationship with the same bank with which you have your savings account.

Account opening

A salary account can be opened only by an employer or a corporation. You cannot typically choose your preferred bank for this account, as it is offered under a tie-up between your employer and the bank. Also, your employer will open only one salary account for you. A savings account is a personal account that that allows you to manage your finances. You can open a savings account with any bank if you prefer and have multiple savings accounts as well.

Account holding

A salary account is usually an individual account, i.e. you cannot open it jointly with another person, and you are the chief signatory of this account. However, you can open them jointly with other people – spouse, parents, children, for instance, when it comes to savings accounts.

Similar features of salary account and saving account

Despite the difference between salary account and savings account, we can also find many similarities between them. These include:

  • Both accounts have quick and easy processes for opening.
  • The passbook issuing and printing processes are the same.
  • Both accounts support NEFT/RTGS/IMPS payment.
  • Both accounts notify you of your transactions via SMS alerts.
  • You get phone banking and net banking facilities with both accounts.
  • There are 24x7 services for both accounts in case of any issues.
  • There are no charges for debit card ATM usage for both account holders.
  • The tax implications for both accounts are the same.
  • You can set up automated bill payments for both accounts.
  • Both account holders are entitled to a credit card


Although the two accounts may look similar, there are several notable differences to help you decide which suits you the best. If you are already employed, your salary may be credited directly into your salary account. Even so, it is better to open a savings account as well, since it enables you to park your savings, create fixed deposits, and earn reward points and cashback, and more.

Happy shopping with the DBS Bank debit card! Download the app to open your digiSavings account instantly and get your debit card!

*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.