2 Things To Remember After Opening Your First Salary Account

Free demat account

Many banks offer a free demat account and a free investment account along with salary account. It is an industry-wide practice to offer a free demat account for the first year. After the first year, the demat account holder is expected to pay the annual fee in the range of Rs 400 to Rs 500. Even most stock brokers do not charge you in the first year for the demat account. So, there is nothing great about it.

Demat account is essential if you plan to invest in shares. If you plan to restrict yourself to mutual funds and fixed deposits, there is no need of a demat account. You mays simply refuse to open a free demat account. You can open it anytime you want in future.

Credit card

If you have landed a well-paying job and your employer is in ‘A’ list, there is a high possibility that you will be offered a free credit card at the time of opening of a salary account. Please note the free credit card means that there will not be any annual charges for the first year. But the bank may charge you from the second year. Also, if you do not pay your credit card bills you are charged a heavy late payment fee along with steep interest charge. There are some credit cards that are free for life – which means they do not charge any annual fee. However, the user is expected to pay the credit card bill in full before the due date. Otherwise, the late payment fee and interest charge will nullify the benefit of zero annual fee.

If you decide to go for a credit card, do check the benefits first. If it does not suit your needs, you can give it a pass. “If you intend to go for one, understand the charges and resolve to be a prudent user of credit. Pay the credit card bill in full before the due date. It will help you build your credit score,” says Sukanya Kumar, Founder of RetailLending.com. To achieve this, sign a debit mandate with your bank which will enable the credit card issuing entity to collect the outstanding bill from your salary account. To ensure it happens, you will have to keep the right amount of balance in your salary saving bank account.