Why Opening Multiple Savings Accounts is a Good Idea and How to Manage?

Savings accounts are the safest place to keep your money while retaining liquidity. There are no limits on how many savings accounts you can open. Having multiple savings accounts can help you save money for different savings goals in the long term. It will ease the whole process of your personal finance management.

Let us understand about having multiple accounts in detail.

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Can You Have Multiple Savings Accounts?

Multiple accounts can be opened in the same bank, or you can invest your money in different savings accounts of other banks.

However, it is always better to diversify your investment. So, keep your money in different savings accounts for your financial goals. Different banks offer different interest rates and benefits to their customers. Invest your money by considering these factors, which will help you achieve your financial goals.

Also, check with the bank if you are eligible for benefits or schemes before opening a savings account.

What Are the advantages and disadvantages of Multiple Savings Accounts?

Advantages

Here is a list of the advantages or pros of having multiple savings bank accounts:

Let’s You Achieve Financial Goals: Banks offer different perks and benefits with their savings accounts to help you achieve your financial goals in the long term. Some banks offer bonuses and higher interest rates for opening a new savings account. If you are willing to open multiple savings accounts, you will enjoy all these added benefits.

Gives a Sense of Security: Having multiple accounts provides a sense of security. Keeping all your money in a single place can be dangerous. If your bank details are compromised, all your money can be stolen.

In case an institute goes bankrupt, it must provide deposit insurance with their savings accounts. The savings account deposit insurance of banks covers a maximum of ₹5 lakhs. Dividing your money into several savings accounts will significantly reduce the chances of losing all your money simultaneously.

Gives Easy Access: Accessibility is one of the biggest advantages of having multiple savings accounts. You can make as many transactions from different bank accounts as you want if you need the money for any emergency.

Disadvantages

Here are all the disadvantages account holders face by keeping multiple savings bank accounts:

Minimum Account Balance Requirement: If you have multiple bank accounts, you must maintain a minimum balance on all those accounts. Keeping track of the balance available on many accounts can be hectic.

Chances of Losing Higher Interests: Some banks do not offer the same interest rates as others. Spreading your funds across different accounts can lead to a loss of higher interest yield. If you had kept the money in a savings account with a higher interest rate, you would have earned more interest.

Auto-Transfer and ECS-Related Issues: Auto-transfer and Electronic Clearance Systems help with bill payments and loan EMI payments. Keeping track of all the transactions in different accounts is a very hectic task.

Fees and Penalties: Some banks charge penalties and maintenance fees on savings accounts. Mostly these penalties are charged in case the minimum account balance is not maintained.

How Many Savings Accounts Do You Need?

There is no particular number on how many savings accounts you need. You can have as many savings accounts as you need. However, to make a smart move, assess your financial goals first. Each financial goal requires different types of financial planning. Open a savings account based on those goals.

It can save you from the disadvantages of opening multiple savings accounts, like keeping multiple accounts requires constant monitoring and maintenance.

How to Manage Multiple Savings Accounts?

Managing multiple savings bank accounts requires planning and organisation. Follow these steps to manage multiple accounts easily:

Step-1: Choose the Correct Savings Accounts

The first step in managing multiple accounts is to choose the perfect bank to open accounts. Before opening any savings account, check all the related details, such as the interest rates, minimum balance requirement, maintenance fees and other benefits.

Step-2: Decide the Purpose and Goals of Each Account

It is important to differentiate savings accounts by considering different financial goals. E.g., Keep a separate savings account for all your emergency expense needs. Open two more savings accounts to save money for your short-term and long-term goals.

Keeping separate books for different financial goals will help you manage your expenses more efficiently.

Step-3: Calculate How Much You Need to Save

Calculate how much you want to save monthly and create a plan according to your financial goals. Do not save all your income; you should also keep enough money for your expenses to avoid using the emergency fund.

Step-4: Automate Deposits

After creating a proper plan, automate your deposits and grow your savings towards achieving your goals.

Savings accounts help people to save their hard-earned money. You must keep multiple savings accounts to manage various financial goals. Before opening a savings account, it is very important to do your research and compare fees, interest rates and other benefits.

FAQs about Multiple Savings Accounts

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Can I open two savings accounts in the same bank with the same phone number?

Yes, you can open two savings accounts in the same bank with the same phone number. Opening multiple savings accounts requires monitoring of minimum balance. Here it helps when you get all notifications of withdrawal in one number.

Does it cost extra money to have multiple savings accounts?

Some banks charge maintenance fees for savings accounts and require a minimum balance.

What is the deposit limit for cash in savings accounts in India?

The maximum deposit limit for cash in savings accounts in India is ₹1 lakh per day. The Reserve Bank of India sets this limit, and all banks must abide by the rule.