3 Reasons a Salary Account Might Be Right for You

Is this an option your employer offers?

If you're a salaried employee, you're no doubt used to collecting a steady paycheck at preset intervals, whether it's every two weeks or once a month. And when it comes to receiving that paycheck, you have choices.

Many workers opt to have their earnings deposited directly into a checking account. That way, that money is accessible to them, and they can take ATM withdrawals and write checks against their balances.

But there's another option you may want to consider if your employer offers it -- a salary account. A salary account is similar to a savings account, only with a regular savings account, you go to a bank and open one up. A salary account is something your employer has to set up for you. And with this type of account, your salary gets deposited into that account, as opposed to you receiving a physical paycheck or having your earnings land directly in a checking account.

Salary accounts aren't very common in the U.S. But if your employer offers this option, here are some benefits you might enjoy.

1. Forced savings

When you're handed a paycheck to cash or your earnings land in your checking account, it can be difficult to carve out room for savings. If you treat your salary account as a savings account, you'll have an easier time staying on track with your goals.

Now, you might be thinking, if you're putting your salary directly into a savings account of sorts, how are you supposed to pay your bills? The answer is, you can always withdraw funds from your salary account. But in reality, the whole forced savings nature of these accounts really works best if you're in a dual-income household and are trying to live off of one salary and save the other. Otherwise, you may not get as much benefit from a salary account.

2. No minimum balance requirement

Some savings accounts come with a minimum balance requirement that can be tricky to meet. But salary accounts generally don't come with this requirement, so you get more flexibility.

3. Protection from financial emergencies

If you're using your salary account as a means to force you into savings, the more money you keep in that account, the more protected you'll be if unplanned bills come your way, or if you end up out of a job for a period of time. A recent Federal Reserve report found that 32% of Americans cannot cover a $400 emergency expense with cash or savings. So if you're in that boat, any account that makes it easier to build some cash reserves is worth considering.

Should you get a salary account?

A salary account may offer you these specific benefits. But if you'd rather go a more traditional route and stick to having your earnings deposited into a checking account, you can always set up an automatic transfer to your savings every month. That gives you the benefit of forced savings while also allowing you to enjoy the flexibility of having a funded checking account.

It's also worth noting that salary accounts aren't very common in the U.S. And since they need to be opened by an employer, you may not even have the option to have one.