Why is a company account needed?
Companies usually are affiliated with a certain bank and have a branch of it on their premises too. When a new employee is hired, a salary account is made for him in that bank so that the credit salary can be transferred directly to that account.
This is beneficial for both the employee and the employer. Giving all the employees an account in the same bank allows the ease of task for the people at HR. All the employees are at the same bank and all the salaries can be paid with a single check. If the employees have accounts in different banks, then HR will have to issue multiple checks every month to pay them salaries.
Moreover, having accounts in the same bank deems them eligible for many concessions on banking services as well for example loans, credit cards, etc. The employees also get instant and hassle-free access to their salaries, and they can easily retrieve them. In addition, the company bank accounts usually do not have a minimum balance limit, so the account won’t get closed if the balance gets to zero at some point in time.
Points to keep in mind while writing bank account opening letters for a company employee.
- Mention full name of the employee, his designation, joining date as well as his monthly salary
- Specify which kind of account you want your employee to have. A few examples of types on bank accounts are salary-based bank account or basic bank account or savings account etc. This might also depend on the designation of the employee hired and the amount of salary he will be receiving monthly.
- Attach a filled and signed bank opening form with your letter. You can obtain these beforehand from the bank beforehand and keep a copy with you.
- Attach the joining letter of the employee for record and future reference. Date of joining and is designation should be mentioned on this letter.
- Inform the employee about these formalities. Ask him before hand to fill the form himself and add the details carefully. Any other documents required such as Identity card, photograph or recent household bills should also be provided by the employee.
- This process should be done as soon as possible. Initiate the process right after the employee is hired so the account can be opened, and the employee can receive his salary by the end of the month. Avoid delays as it demotivated the employees and gives a bad name to the company.
An example of a bank account opening letter for a company employee is given below.
The Chase Bank
Dear Branch Manager,
I am Mr. Alex Smith, Manager HR at Bluebird Company, London. I deal with the accounts and finances of the employees at our company. As per Bluebird company policy, the salaries of the employees at our company are transferred to the salary bank accounts at the Chase Bank only. I hereby request you to please open an account at your bank of a new employee we hired as a sales executive with effect from 29th August 20XX. Following are his details.
Name: John Barber
Designation: Sales executive
Email: [email protected]
Contact number: +1 [X]
Monthly salary: $5500
I have attached the account opening form with this letter, filled and duly signed by the employee himself. A copy of his Identity card, recent utility bills, and joining letter are also attached for your reference. We will be thankful for opening bank accounts as per the terms decided between us.
Thank you for your time and hope we will have more affiliation in the future.
Manager HR, Bluebird Company.