Do multiple Savings Accounts really suit your needs? It’s time to evaluate the pros and cons to find out.
Ever wondered what the benefits of having multiple Savings Accounts are? Well, just like with pretty much everything else, it has its own pros and cons. The secret lies in doing your research, analysing the positives and negatives and deciding accordingly. Multiple Savings Accounts might make sense for you or they might not. It totally depends on your needs and preferences.
Additional Reading: Top 5 Savings Accounts For 2016
If you have a couple of financial goals, opening separate bank accounts makes sense. It can help you focus separately on each of these goals and make it easier for you to keep a track on the progress of each one.
If you haven’t already opened at least one Savings Account, then here are some reasons for you to do so.
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Short-term and long-term goals. Here I come!
A Savings Account is a great way of saving for your short-term and long-term goals. If you’ve just started working, the first step you must take towards a stable financial future is opening a Savings Account.
Opt for separate salary and personal accounts if you wish to minimise the confusion. It can teach you how to save better since you won’t have free cash at your disposal all the time.
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Interest rates
One of the best things that can happen to your money in a Savings Account is the interest you earn on it. Although the interest rates may not be as high as a Recurring or Fixed Deposit, it’s still way better than hoarding cash at home.
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Safety
Storing all your money (or most of it) in a bank account is certainly a safer and more secure option than keeping it all at home.
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Go online
Opening a Savings Account has other benefits as well. Apart from getting to store your money in a safe place and earning interest on it, you get to make use of other facilities like online banking, phone banking etc. that can make your life easier.
Additional Reading: Top 6 Savings Bank Accounts Of 2017
Now that you know all about the benefits of opening a Savings Account, we’re going to run you through the pros and cons of having multiple accounts.
Pros
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Savings goals unlocked
You could open separate Savings Accounts for each of your goals (both short and long-term) and save accordingly. This way, it will be simpler to track them down and save for each one without disturbing the other.
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If one bank fails, you can bank on the other
Multiple accounts in different banks can protect you from risk. How? If one of these banks go down, you might not immediately get access to all your money. That’s when your Savings Accounts (in other banks) will act as your knight in shining armour. In case of an emergency, it’ll help ensure that you have some money in a safe place.
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Multiple benefits
We mentioned the added benefits of Savings Accounts before. Well, the more accounts you have, the better benefits you get to avail. How cool is that? If one bank’s ATM is down and you don’t like using your Debit Card at another bank’s ATM, having a spare bank account can save you from all the extra charges.
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Doubts? Nope.
If you tend to be doubtful about the service provided by one bank, you should definitely go in for multiple Savings Accounts. That way, you’ll not only get to choose the best bank available, you’ll also get to experience the difference. Change is good after all, isn’t it?
It’s completely alright to expect a high standard of service from banks. Before opening an account anywhere, you must try researching a bit though. Try talking to your friends/relatives who have accounts there. Feedback can help. If you’re getting a chance to learn from someone else’s mistakes, why make your own?
Let’s move to the disadvantages of multiple Savings Accounts now.
Cons
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Minimum balance troubles
Since you have a couple of Savings Accounts in different banks, you also need to maintain the minimum balance in each of these. What happens otherwise? You end up paying lots of unnecessary charges for not being able to maintain this minimum balance. That doesn’t sound good, does it?
If you know that you can’t juggle well with different accounts, why complicate things for yourself? You must try sticking to one Savings Account in that case.
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Confusion
Confusion and chaos can never be good. Especially when it involves money matters. You won’t want to get stuck with all those mental calculations. If numbers confuse you beyond a point, it’s better to stick to one account only.
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Bye bye good interest rate
If you keep spreading your money among different bank accounts, instead of storing it all in one, you might not get a good interest rate. Some banks pay better interest rates as compared to others. So, if you want to get a good interest rate, you must put all your money in one account (the one with a higher rate of interest, of course).
There you have it. All you need to know about the pros and cons of multiple Savings Accounts. Remember, opening multiple accounts depends on your needs. So carefully weigh the benefits before you take the plunge.