Banking

What Happens to your Salary Account After Switching your Job?

Everyone changes jobs when they get better opportunities or higher pay. So what happens to the salary account in such a case? Many are worried about this. Sometimes people think they should close the previous company’s salary account or run it? Either they should operate it as a normal savings account or open a new account? Go through this article and know what happens to your salary account after switching your job and also know if you need to create a new salary account or not.

Salary Account is Converted into Savings Account

  • If you quit your job, the salary account gets converted into a savings account. Your employer stops paying into that account. It remains a salary account till the salary is received.
  • Some banks convert salary account to savings account after a few days. While some other banks keep it as a salary account. There is no minimum balance requirement in salary account. But if that changes, you need to maintain the minimum balance requirement. Bank charges non-maintenance fee if you do not maintain minimum balance.

Alternatively You can Create a New Salary Account

If you switch jobs, you can open another salary account with the new employer. Your employer opens a new salary account with a partner bank. Salary accounts also offer zero balance, good interest rates and additional services. But you don’t need to close the salary account if you are employed in a new place, you just needs to see your account regularly.

The Auto Debit System is Affected

Those who auto-debit EMI, SIP, insurance premium and UTI bills from their salary accounts are in trouble. If the Salary Account is changed to Savings Account and you open a new Salary Account then you need to update the Auto Debit Instruction. If you don’t do that then fine, late fee etc. will charged to your account.

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