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Most of us are introduced to the world of banking through a Regular Savings Account. The interest-bearing account offers enhanced flexibility, allowing us to deposit and withdraw funds as required.
However, to offer enhanced convenience to the customers, banks now offer a wide range of Savings Accounts. For instance, there is a Salary Account with features customized to meet working individuals' banking needs better.
But what is the difference between Salary Account and Savings Account? Let’s take a look.
A Salary Account is a type of Savings Account, which is generally opened through an employer i.e., an account available by virtue of being employed with the employer. The interest-bearing account is used for crediting the monthly salary of the employees. At AU Small Finance Bank, you can open a Salary Account with us and unlock various benefits:
A Savings Account is your regular interest-bearing bank account used for depositing your savings. Any resident of India who is 18 years and above having KYC documents can open an AU Savings Account with us. It helps you to not just save but also explore many financial opportunities and services:
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Salary Account
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Savings Account
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Purpose
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Accounts opened with Bank through the employers for their employees to credit their monthly salaries
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A Regular Savings Account is used to deposit your savings with a bank securely
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Eligibility
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Salary Account can only be opened for salaried employees
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Anyone who is 18 years and above can open a Savings Account
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Minimum Balance
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Salary Accounts generally don’t have any minimum balance requirements
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Most Savings Accounts have minimum balance requirements
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Account Convertibility
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Salary Account is converted to a Savings Account by the bank if no salary is credited into the account for a certain period (generally three months)
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Savings Account can be converted into a Salary Account if an employee joins a new company that has a banking relationship with the same bank for the Salary Account of their employees
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There is no difference between Salary and Savings Accounts when it comes to tax treatment. As both the accounts are essentially Savings Accounts, the interest you earn from the accounts is taxable under the head "Income from other sources.".
However, under Section 80TTA of the IT Act, interest income of up to INR 10,000 from all the different types of Savings Accounts in a financial year is eligible for tax deductions. So, only the Savings Account interest above the threshold of INR 10,000 is taxable.
