Here’s why you should keep your salary account and savings account separate

While selecting a savings account, customers generally check the interest rate, the quality of banking services, and the convenience offered by the bank’s mobile banking app.

Maintaining separate salary and savings accounts can help customers benefit from several features offered by both the categories of bank accounts. 

What are the key differences between a savings account and a salary account?

Several benefits offered by savings accounts overlap with the ones offered by salary accounts; however, they are different in certain key aspects. Here are the differences between a savings account and a salary account: 

• A savings account limits daily withdrawals and has a minimum balance requirement. Salary accounts, on the other hand, have no minimum balance requirement. 
• A savings account can be opened by an individual, whereas a salary account can only be opened by a company for their employees. 
• Certain savings account may limit the amount that a customer can withdraw on a daily basis. 

What are the benefits of keeping one’s savings account separate from one’s salary account? 

Customers can benefit a great deal by maintaining separate savings and salary accounts. Here are the advantages of doing the same: 

• Customers can track their expenses more conveniently: Keeping one’s salary account separate from one’s savings account can help in organising one’s finances. For instance, if a customer chooses to pay all their utility bills using their salary account, they can account for their monthly utility-related expenses more easily. Conversely, if a customer uses a single account to make every payment, they will find it a lot more difficult to track specific expenses. Maintaining a separate salary account can therefore help customers budget better.  
• Maintaining separate accounts can help customers save more: If a customer has separate salary and savings accounts, they can set goals for saving each month and accordingly transfer money from their salary account to their savings account monthly. Saving is a lot more difficult for customers who do not maintain separate salary and savings accounts. In case of an emergency, a customer needs to only check their savings account to get an estimate of the amount that they can expend at the moment. 
• Having two accounts can help customers benefit from more rewards and offers: Banks offer a range of benefits to customers who opt for salary accounts, such as convenient mobile banking, Net banking, ATM withdrawal benefits, and online banking benefits. Furthermore, savings accounts offer the same benefits to customers. A customer who has separate savings and salary accounts can therefore avail double the benefits. 

• Customers can benefit from a higher interest rate: There is often a difference in the interest rates offered by banks via their savings and salary accounts. Depending on the banks in question and the difference in these interest rates, customers can benefit from a higher interest rate on one of the accounts. It is advisable for a customer to move their savings to a bank account that offers a higher interest rate. 

Customers can therefore increase their savings, budget more efficiently, and benefit from more offers and rewards by maintaining separate savings and salary accounts.