Savings Account are the basic account services provided by banks wherein a customer can use to deposit money and withdraw as per need basis. There are no limits to the amount that can be deposited and the customer can withdraw the entire that is there in the savings account. Savings Account is basically a money management tool and it is essential to have for a good financial life ahead. Many of us prefer to keep more than one saving account. But have you thought of the reason behind this? People generally have a misconception that people who have lots of money will have multiple savings account. But it is totally a myth. Having multiple saving account help people to achieve different financial goals, but it has both some pros and cons as well. No. of account totally depends on the requirements and personal preferences. Let us see in detail the pros and cons of having multiple savings account.
Pros
A way to Fulfill Your Financial Goals
Having a savings account is always a good thing and if have multiple financial goals then keeping your money in different account for different things helps you. You can get to know that how much is needed more and then you can accelerate or decelerate your savings accordingly.
Provides Safety
It provides a feeling of safety and security when your money is kept in a bank account. It is far better than keeping your money at home or somewhere else. There is no risk like theft.
You get Interest
Keeping your money in savings account gets you interest. Although it is not more the interest on the Fixed Deposits or Recurring deposits but still it is a wise thing to do. As if you fix your money you can’t withdraw from that, if does before the lock in period you will not get the interest and other benefits as well. Hence if you are not certain about your requirements it’s better to keep your money in savings account that in FDs.
Operating Your Money Becomes Easy
Operating your money from a savings account becomes easy. You can use mobile app of your respective bank and even net banking and phone banking facilities are available through which you can operate while being at home or anywhere.
Other Benefits
There are additional benefits of Savings Accounts as well. The more accounts you have, more and better benefits you get to avail. It quite cool isn’t it? If one bank’s ATM is down and you don’t want to use another bank’s ATM as there are uses charge as well when used other bank, having more than one bank account/savings account can save you from all the extra charges. And you have more options as well.
Savings Goals can be Unlocked
One can open separate Savings Accounts for different goals. Both short and long-term goals can be achieved by saving accordingly. This way, it becomes simpler and easy to track down and save for each one without disturbing the other goals.
Cons
Trouble in Maintaining Minimum Balance
All savings account have some particular amount to maintain as a minimum balance. This minimum balance totally depends on bank to bank. There can be certain situation in life there one is out of money. In those cases it is difficult to maintain a minimum balance in one’s account. In the case if one is having more than one savings account, it becomes more difficult. It can also result to paying penalties and fines in though time.
Low Interest Rates on Deposited Amount
Banks have fixed interest rate on savings account. This rate can vary from bank to bank, as it totally depends on the bank. If one using more than one saving account then in that way he/she may not get the maximum interest rate which they could have got from the other bank. Even if there have an account in the bank which offers maximum interest rate then also they can’t keep their whole money in that bank. As they have different accounts and they have to maintain a minimum balance there also.
Gives Rise to Confusion
Generally most of the people are not full acknowledge about the benefits and penalties regarding their savings account. In case there is more than one account the confusion can be more. Being this the money matter, it requires more celerity. Here is no scope for myths and uncertainty, this can end up by baying penalties or low interest.
It is true that are advantages of having multiple savings accounts but there are certain disadvantages too. Having Multiple Savings Accounts provide more flexibility and better cash management, it also allows you to save money through lower fee and charges. However, the decision to have multiple savings accounts should totally depend on the frequency of transactions one does. If the number of financial transactions done by you per month are limited a single savings account should suffice. It is equally important to ensure that you close the bank accounts that you do not use or those have poor features. choose for your savings accounts wisely that suit your needs, offer a high rate of interest and those who charges less on palatines.
