A salary account is the particular bank account (usually a savings account) where your salary is deposited into. But it doesn’t have to be just that. A salary account is changing as financial institutions adapt to offer additional services to cater to the needs of their customers.
By definition, a salary account is different from a savings account. They may seem similar but they serve different functions in terms of purpose and ATM withdrawal fees.
Why do you need a salary account?
On the surface, a salary account is merely an account to receive your salary. However, there are a lot of pros that come with having a salary account.
1) Easier to manage your money
Dividing your money into different places makes it easier to stick to a budget; ensuring that you maintain financial discipline. A separate salary account makes this easier to manage as it is specially designed to help you have multiple bank accounts.
You can still make do by just having a salary and a savings account. One for your long-term savings and emergency fund, and the other for your normal monthly expenditure.
Add a fixed deposit to this mix and you’re well on your way to proper financial discipline.
2) Preferential Rates Offer
If we take HSBC Amanah’s effort as representative of what a salary account looks like, then you can expect to benefit from other offers like access to preferential rates for home and personal financing.
3) Save on fees
Of course, there is the regular waiver of monthly fees for salary accounts. This is a common feature for this sort of account, and rather necessary to allow people to completely withdraw their salaries to be moved elsewhere.
From there you will see features specific to each bank, their unique selling point as it were. In this case, it would be waiving withdrawal fees for MEPS ATMs throughout the country and providing access to the global network of ATMs, in the case of HSBC / HSBC Amanah*. Additionally, qualifying salary account holders will also get access to priority banking lanes.
How to choose the best salary account?
If all of the above perks sound good to you, it’s time to shop for a salary account. There are a few criteria to look at when you are choosing a salary account that’s suitable for your needs:
Despite the digital age, sometimes withdrawing your money at the ATM and visiting the branch is inevitable. So, it makes sense to ensure the bank has all these facilities near your residence and your place of work. However, if you travel a lot, it will also be beneficial to ensure the bank is accessible globally via the ATM.
2. Accessibility to financing
If you need financing in the form of home financing, personal financing or credit card, it doesn’t hurt to have a salary account that offers preferential rates for these.
3. Other perks
Some salary accounts also come with special features or perks such as automatic recognition as a premier customer, if you are eligible. For example, HSBC Amanah Perks@Work proposition allow customers are instantly recognised as HSBC Amanah Premier / Advance customer, based on eligibility which unlocks even more benefits.
How to open a salary account
Opening a bank account has never been easier today. Opening a salary account can be done easily too. Here are three ways you can open a salary account:
- You could do it yourself just like how you would open a savings account.
- Your employer could also do it on your behalf.
- You could convert an existing account into a salary account. This doesn’t necessarily have to be a savings account. Your bank will usually have its own list of accounts that qualify for the conversion.
For example, HSBC Amanah has the Perks@Work programme which allows its customers to nominate a Premier Account-i, Advance Account-i, Basic Savings Account-i, Basic Current Account-i, or Home Smart-i Account to be converted.
Switching your salary account back to your original account is a rather simple affair. Most banks will automatically make the change for you if no salary is deposited for more than three months. An important point to note in case you make changes to your salary payments and want to retain the benefits of your salary account.
Having a bank account to receive your salary is a norm and also a prerequisite for most jobs, so, you might as well get extra benefits out of it. A salary account gives you more for your salary and it doesn’t take much extra effort to make the switch.
Do the necessary homework on salary account and choose an account that gives you the best benefits for just getting a salary every month. And if you still have doubts, it’s best to ask your banker about this before deciding on whether a salary account, or which salary account would be a suitable option for you.