Important factors to consider before opening a salary account

A bank account in which an employee's salary is credited is called a salary account. Employers open a salary account for their employees and directly deposit the salary into the account. The employee can now manage the funds through the salary account. This makes the process of paying salaries easy.
Salary accounts offer several benefits to the employee and employer. The process of opening a new bank account is quick and hassle-free. Although there are many positives to opening a salary account, one needs to consider a few factors before opening an account.
Minimum average balance
Typically, banks ask account holders to maintain a certain amount in their accounts. This is known as the minimum average balance. In the case of not having the minimum amount, fees and penalties may be levied. Before opening a salary account, one should know that salary accounts are zero-balance. This means that no minimum amount of funds must be kept in the bank account. Zero-balance account opening is quick, easy and can be done online.
Interest rate
Like savings accounts, salary accounts can earn interest rates as well. A bank offers interest to account holders for depositing money in the account. Interest rates are typically low and vary from bank to bank. An individual should carefully consider and compare the different interest rates before opening a new bank account. A higher interest rate can help generate passive income, but at the same time, it shouldn't be the only factor when selecting a bank.
Payment facilities
In the age of fintech and modern technology, it is important to have several different modes of payment. One should consider the other payment facilities offered by the bank. Payment options like credit cards, debit cards, cheques, online transfers, and UPI are some of the most common ways to transact and should be offered to the account holder.
Convenience
It is crucial to make the banking process simple and convenient for employers and employees. Before opening a zero-balance account, one should ensure that a bank offers convenient ways, like mobile bank and net banking. Mobile banking and net banking allow one to manage their funds through their phone or computer easily. Tracking of funds and transactions can be done quickly with just a click.
Credit facilities
In times of need, loans are a helpful way to finance an individual's various needs, wants and goals. Before opening an account, it is crucial to consider the different loans offered to a salary account holder. One should also check the interest rate at which the bank provides the loan. Having a salary account with the same bank makes it easier for a bank to assess the income and account statements of the individual.