Govt rolls out new salary account package with banking, insurance, card perks

For central government employees, a salary account is set to become far more than just a channel for monthly pay credits. The Department of Financial Services (DFS) has rolled out a new composite salary account package that integrates banking services, insurance cover and card-related benefits into a single account, creating a comprehensive financial solution tailored for government staff.

Announced on Wednesday, the initiative is aimed at central government employees across all categories, Group A, B and C, and will be offered through public sector banks. The move is designed to simplify financial management by automatically linking multiple benefits to the salary account, eliminating the need for employees to manage separate products for loans, insurance and premium card services.

One account, multiple benefits

Under the new framework, government employees will continue to enjoy a zero-balance salary account, but with enhanced features. Banks will offer concessional interest rates on key loans, including home, education, vehicle and personal loans, making it easier for employees to meet major life expenses at lower borrowing costs. Processing and documentation charges on these loans will also be reduced or waived, depending on the bank and employee category.

A major highlight of the package is the insurance cover built directly into the salary account. Employees will receive personal accident insurance cover of up to Rs 1.5 crore and air accident insurance of up to Rs 2 crore, offering substantial financial protection without the need for separate policies. In addition, permanent total and partial disability cover is included up to Rs 1.5 crore.

The package also features in-built term life insurance cover of up to Rs 20 lakh, with an option to enhance coverage through affordable top-up plans. Comprehensive health insurance for the employee and family is another component, again with top-up facilities to increase protection at reasonable premiums.

Premium card features

Debit or credit cards linked to the new salary account will come with features typically associated with premium banking products. These include unlimited free transactions, zero annual maintenance charges, reward points and cashback offers. Depending on the salary level, employees may receive higher-end card variants such as RuPay Platinum or Select.

Some card variants also offer airport lounge access—both domestic and international—at defined frequencies during the year, extending lifestyle benefits that were previously less accessible to many salaried government employees.

 

Why the new package matters

Until now, many government employees relied on standalone insurance policies, separate premium cards or higher-cost loans to meet their financial needs. By consolidating these services into a single salary account, the government aims to enhance financial security, improve ease of access and reduce out-of-pocket costs, without adding administrative complexity.

According to the finance ministry, the package has been developed in consultation with public sector banks to ensure consistency in benefits and smooth implementation, regardless of where an employee maintains their salary account.

Rollout and implementation

Public sector banks have been directed to actively promote the new offering by displaying detailed information on their websites, conducting awareness programmes in government offices, and reaching out directly to employees. Banks will also assist employees who wish to migrate their existing salary accounts to the new composite package, subject to consent.

The package was formally launched by DFS Secretary M Nagaraju in the presence of senior officials from State Bank of India, other nationalised banks and the National Payments Corporation of India (NPCI), marking a coordinated push to upgrade salary banking for central government employees nationwide.