Converting Salary Account to Savings Account – Things To Remember

Though the agreement of a salary account lies between the bank and the account holder, but after conversion, salary accounts will no longer offer you the same benefits as before.

So, if you are undergoing or about to undergo the process of converting your salary account to a savings account, here are a few things to remember which can be extremely helpful.

Salary Account & Your New Job

Before you convert your old salary account (held with a previous employer) to a savings account, do check with your new employer if they would allow you to continue holding on to your existing salary account. This is possible if the new organization too holds accounts with the same bank as your previous employer. If it is possible, it will save you a fair bit of paperwork which you’d have to submit in order to open a new salary account, and also one more account to manage.

Do You Need Another Savings Account?

In case your new employer does not have an account with the bank where you previously held your salary account, do give it some thought, whether or not you’d like to create an additional savings account of that salary account.

Now, there are two ways to go about this. If your previous salary account was the first account you’ve ever held, then it is advisable to convert that salary account to a regular savings account.

This way, you will have a savings account in addition to your existing salary account where you can get receive credits from other sources and make payments for your investments like Systematic Investment Plans (SIPs), EMIs for a loan or insurance which you may have taken.

Check For The Minimum Balance Requirements

Savings accounts usually require the holder to maintain a certain amount as minimum account balance. Your converted savings account may not be an exception. So, whenever you are converting a salary account with one bank to a regular savings account, do check beforehand the minimum balance which you will be required to maintain for that account.

This is important because, banks do levy varying amounts , which may sometimes be quite high, as penalties for non-maintenance the required minimum balance in savings accounts. For instance, Axis Bank require savings account holders in urban and metro areas to maintain a minimum balance of Rs 10,000. However, banks like Standard Chartered require account holders to maintain a minimum balance of Rs 25,000 for a savings account.

Branch Locations

When it comes to banking, another factor which comes into play is your bank’s branch location. Though a majority of banking functions can now be done online via the internet or mobile banking, there are several other banking services which can be availed only at the branch location. There are many services that can only be availed at bank premises. This is why it is important to find out whether or not the bank you’re converting your salary account with has a branch nearby for easy access. Ideal locations would be near your office / workplace or your house, making it easily accessible.

Branch and ATM Density

One of the primary factors which influences our choice for a bank would be its accessibility. Before you consider to convert your old salary account with a particular bank to a savings account, do find out whether or not the bank has a robust and easily accessible branch as well as ATM network, not just near your house or workplace but also at places and areas which you might frequent.

Banks like SBI, PNB, HDFC, Kotak Mahindra and more have a wide spread network of branches and ATMs, making it easy for its customers to have access to banking facilities, especially in times of urgent need.

Remember To Change Your Communication Address

When it comes to salary accounts, more often than not, we provide our workplace address for bank-related communication purposes. However, when you convert the same salary account to a savings one, they do always remember to change the address for communication as well. Otherwise, all information about your account-related activity like monthly statements, credit/debit card bills to more sensitive information like internet banking / mobile banking passwords, debit/credit card PIN, chequebooks, etc., will continue to be sent to your now ex-office address and are at risk of being misused. To prevent that from happening, do remember to change your mailing (snail mail and email) address once you have switched from one workplace to another.