Salary Account: When does a Salary Account with Zero Balance become a 'Penalty' Account? know here...

Nowadays, changing jobs has become a very common thing, so whenever any of us joins a new job, the company opens salary accounts of its employees in a fixed bank. But often people forget that the salary account of their previous office is no longer in use, and it is necessary to close it. This negligence often becomes the cause of financial troubles and unnecessary bank charges later on.

Why is it wrong to leave the old salary account like this?

Often, people think that even if the old salary account is not closed, it will not make any difference. But the truth is actually exactly the opposite. The salary account remains a zero balance account only as long as your salary keeps coming into it. As soon as the salary is not credited for 2-3 months, the bank converts it into a regular savings account, and this is where the trouble begins.

Charges are levied as soon as it is converted into a normal savings account.

Actually, due to the tie-up of the company, many facilities are free on the salary account, such as zero balance facility, low charges, and a free debit card, but as soon as the account becomes a regular savings account, the bank applies the rule of maintaining Minimum Average Balance (MAB) in it. If you do not maintain this balance, the bank deducts a penalty every month or quarter.

When is the penalty levied?
Suppose your old salary account is in a metro city branch, where the minimum balance condition is ₹ 10,000, then if there is only ₹ 500 in the account, the bank will start deducting a penalty to complete the remaining balance. Not only this, if the charges keep getting deducted continuously, the balance can also go negative.

Debit card and SMS charges are also levied.
Not only this, the annual fee of the debit card is waived in the salary account, and benefits like SMS alerts are also free. But when a regular savings account is opened, the bank starts charging the full amount on it, which means money will keep getting deducted from you every year, even if you don't operate the account.

Risk of the account getting deactivated
If you don't do any transactions in the old account for a year or two, then the bank declares it a dormant or inoperative account. Then, to activate such an account again, you have to go to the bank and update KYC, etc.

Bad effect on credit score
The bank can also send information about continuous charges being deducted from the old account and the balance being negative to the credit bureau. In such a situation, it can spoil your credit score. Due to a bad score, you may face problems in getting a loan or a new credit card in the future.

Some banks have abolished the minimum balance.

However, many government banks like State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, and Indian Bank have abolished the condition of minimum balance from their savings accounts. Due to this, bank customers will not have to face any kind of penalty if the balance is low. But there are still some famous banks where a minimum balance has to be maintained.

So what to do?

So if you have an old salary account and now salary is not coming in it, then first of all, go to the bank and get it closed and if for some reason you do not want to close the bank account, then always maintain a minimum balance in it and keep doing transactions from time to time. Apart from this, track the old account along with the new job account, so that charges are not levied on it without information. (Note: The news is based on general information only)

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