“I had a Salary account in a leading private bank. When I left the company, I didn’t close it. And never happened to check it. Almost after TWO years, I noticed it has been converted into a regular savings account, and for not maintaining the average quarterly balance (AQB), I was fined. I want to know whether this is valid.” Are you in the same boat as this aggrieved customer? Or, are you planning to switch the job?
Is that how you feel like too? 😉
Fintuned helps you unravel the mystery behind salary accounts and what you have to watch out for.
Salary accounts are opened by employers to credit the salary of their employees. It is quite similar to your regular savings account, but with numerous freebies like:
- Zero balance requirement
- Free drafts and pay orders
- Zero annual or issuance charges for Debit Cards
- Preferential interest rates on personal loans
But what more important is (which account holders tend to ignore) – Salary accounts are converted into a regular savings account, in case no salary is credited for 3 months consecutively. All the benefits associated with salary account cease to exist. So, what should you do if you have switched jobs?
- Find out whether your new employer hold salary accounts with the same bank. If they do, you could easily retain the account by furbishing details to the HR and continue to enjoy the corporate account benefits.
- If that is not the case, you may choose to keep that as a regular savings bank account. This additional account can be used for making payments for SIPs, Loan EMIs, or ULIPs.
- Else, you can simply walk in to the closest branch and apply for closure of account.
In case you decide to convert it into a savings account, do check the following:
- Look at the minimum balance requirements and decide if you will be able to maintain it. Non-compliance of which attracts high charges.
- Do consider if the bank has a good branch and ATM network, especially in places you visit frequently.
- Update your communication correspondences – contact number, address, e-mail id etc., in case these have changed when you have switched the job.
So, take your time and think wisely how you want to keep the salary account, so that you can avoid paying hefty fines. Let us know if you have encountered any similar issue, or you want to know more. Comments below. 🙂 Cheers !!