For an organisation,starting a salary account with a bank enables easy disbursement of employees salaries. To start such an account,the organisation must send to the bank an advice in the form of a cheque/debit instruction,ECS,etc. The organisation must also send to the bank the salary details of the designated employees. Once the relationship is established,the accounts of the employees are credited with their salaries on the specified date. The advantages Establishing a salary account with a bank has many advantages: the organisations paperwork gets reduced,the remittance cost comes down,and salaries get credited to employees accounts in a timely manner. Before this facility came into being,most organisations gave cheques to their employees. Employees had to deposit these cheques at their banks,and it took at least two to three days before the money got credited to their account. With the salary account facility,employees receive the salary on the very first day of the month (or the day chosen by the employer). Facilities for salary account holders Typically,banks offer many facilities to holders of salary accounts. In a normal savings bank account one has to maintain a minimum balance,which in the case of private and multinational banks can be high. Failure to maintain the minimum balance invites a penalty. In the case of salary accounts,this stipulation is waived. Such account holders can withdraw all their money. Employees also get free access to the ATM network of the bank. Services like phone banking,Internet banking and mobile banking also come free of cost. Usually debit cards carry an annual fee. This fee too is waived in the case of a salary account holder. Employees can also avail of such online banking facilities as funds transfer,bill payment,and online shopping through their accounts. Bill payment service is often offered free or at minimal cost. Many banks also offer account holders depository services with free online trading account. Banks also offer preferential pricing to their salary account holders on loans against securities,car loans and personal loans,and also on credit cards. Such account holders can do branch banking in another city free of cost with no cap on size of transactions. Many banks offer free demand drafts of up to Rs 25,000. Customers can request for a demand draft through phone or Internet banking. Some banks also allow an overdraft facility to employees with a minimum net monthly take-home salary of Rs 10,000. The benefits offered by banks to salary account holders are many. If the organisation you work for does not yet have a relationship with a bank,urge it to establish one.
