Many people think converting a salary account into a savings account is a daunting task, but with the right information and simple steps, it can be done easily. It’s crucial to complete this process on time, especially after your salary has stopped coming in. Otherwise, once the zero balance facility ends, you could face a hefty penalty for not maintaining a minimum balance. Today, we’ll learn how to convert a salary account into a savings account quickly and without hassle.
Salary Account Features
A salary account is a special bank account opened by employers to directly transfer their employees’ salaries. This account is specifically designed for working people. Its most important feature is the zero balance facility (i.e., no minimum balance requirement). Additionally, debit card fees are often waived. This account is excellent for receiving your monthly salary and for everyday financial transactions.
Special Features of a Savings Account
A savings account is primarily used to save money and earn interest. Unlike a salary account, it is available to everyone. Its key features include interest rates on deposits, flexible transaction times, and the option of long-term savings plans. It is best suited for those who want to save with simple and secure banking facilities.
6 Surefire Steps to Convert a Salary Account to a Savings Account
Once your salary stops being credited to that account, it is essential to immediately convert or close it to a savings account.
1. Get Information from Your Company
First, talk to your bank and your HR department. Some companies have special agreements with their banks that govern employee salary accounts. Don’t begin the process without this crucial information.
2. Contact the Bank Immediately
If your company allows it, contact your bank immediately. You can visit a bank branch, call customer service, or talk through the mobile app. Inform the bank representative that you want to convert your salary account to a savings account. They will explain the entire process to you.
3. Submit a Formal Request
After contacting the bank, you must formally apply (request). Bank staff will guide you through the necessary forms and procedures.
4. Submit the Required Documents
The bank will require certain documents for verification, such as an Aadhaar card, PAN card, or passport, and proof of address (such as an electricity bill or rental agreement). These documents make the process faster and easier.
5. Complete All Formalities
After submitting the documents, you may need to fill out additional forms or provide additional documents as requested by the bank. It’s also important to complete the closure formalities of your old salary account so that the new savings account can be activated.
6. Activate your new debit card
Once the bank verifies your documents, your new savings account will be opened. You’ll receive a new account number, passbook, and debit card. Activate your new debit card and enjoy all the benefits.
Great Benefits of a Savings Account
Converting to a savings account offers two major advantages that are not available with a salary account.
Great Interest Benefits
You earn interest on the money kept in a savings account, which is not typically available with a salary account (if it reaches a zero balance). This is the simplest way to grow your money.
Financial Control and Convenience
Savings accounts offer additional features like online banking, mobile apps, bill payments, money transfers, and linking to a retirement account, giving you complete control over your finances.