Asides from earning your monthly emolument through a salary account, there are a lot of services you can access through your bank using your salary account.You can choose to open a current or savingssalary account in any bank approved by your employer.
While a current salary account can do more for you than a savings salary account, the later will earn you little interest on your balance every month, but your bank will charge you regularly on the current salary account.
Current salary account has similarities with the normal current account, the same with savings salary account.
However, there are some facilities you can access from your bank with the salary account but ordinary current account may not offer you.
Here are five major services your salary account can do for you apart from depositing and withdrawal of funds.
School fees advance: When it is time for you to pay your children’s school fees and you are broke, you definitely will not want your children to be sent back home for being unable to pay. As long as you work in an organisation where salaries are paid regularly, your bank will know that it can always recoup its money back by deducting it each time your employer settles you. Banks provide the salary account owner the school fees advance and givethe accountholder time to repay it back over a period of some months.
Own your home: With a salary account, you can own your house and be living in it, while you are paying for it. Having a salary account and working in a reputable organisation can boost your chances of getting mortgage support approved by your bank. With this arrangement, you will cease to pay rent to your landlord. Some banks can give you up to 20 years to repay the mortgage loan.
Guarantor: You can stand as a guarantor for another person seeking a loan facility from the bank with your salary account. As long as you work in a recognised corporate organisation, you will be required to show evidence of your financial worth. However, you are advised to ask questions and understand the terms of standing as a guarantor for a borrower before you make the commitment.
Loan without collateral: When you don’t have an asset to present to your bank to secure a loan facility, you can present your salary account. Salary accounts are recognised as collateral for some facilities except you work in a firm where your employer is notorious for salary payment default. When you do not default in paying your loan, your bank can give you access to more loans any time you apply for one.
Hirepurchase: You can acquire assets on hire purchase through your organisation, while the payment will be regularly deduced from your salary. This allows you to keep the assets and be using them even before you finish repaying the loan.
Making use of your savings account
Savings account is probably the most common type of bank account. It is also very easy to open and operate. Your bank will not ask you to produce witnesses to sign for you before you can open the account.
You will only be asked to provide basic documents and information about yourself.
When you open a savings account, you can derive the following benefits from it, according to https://www.discover.com.
*You can earn interest. Even though small, little interest is paid on your savings account regularly.
Many banks charge you a monthly fee unless you keep a high minimum balance. With savings account interest rates so low, that fee can easily eat up any interest you earn on your savings. With a no monthly fee savings account, you do not need to worry about that happening.
You can still access your money whenever you want. Sometimes, the unexpected occurs and you need to use some of your savings. Being able to access your savings when you need to is the main advantage of having a savings or an emergency fund.
With an online savings account, your money is available when you need it. You should note that there are limitations on the types and numbers of transactions for a savings account.
You can set up automatic deposits to steadily build your savings.
Making saving money a habit is hard but it does not have to be. You can take your willpower out of the equation by setting up weekly or monthly deposits from your current account into a savings account.
The amounts don’t have to be large. Over time, the deposits add up and every day you are earning interest on the money in your savings account.