The Pros and Cons of Having Multiple Savings Accounts

For a secure future and consistent savings, some people recommend a basic savings account, whereas others advocate multiple savings accounts to save for various personal aspirations. Family ke saath holiday ya bhai ka education loan? Wondering about what to save for and how? A savings account holder receives interest on the deposited amount and several benefits that vary from bank to bank that may help save and earn for your specific aspirations. Briefly, here are some benefits of a savings account:

1. it’s a risk-free option
2. you earn interest on the deposited amount
3. account holders get liquid cash in hand in case of emergencies,
4. insurance cover in case of accident or death and
5. most importantly it helps you save.

Multiple savings accounts come handy when people want to save for many of these reasons.

Listed below are the pros and cons of multiple savings accounts:

Pros

- Internet banking has made it easy for customers to start multiple savings accounts from the comfort of their homes. These accounts can be in the same bank or several banks. A few advantages of having multiple savings accounts are as follows:

• Multiple perks cater to multiple goals:

  Some banks offer a bonus on opening on new savings accounts, while others offer good interest rates which work in favor of the account holder. If an individual holds multiple accounts, he might enjoy each of their added benefits. It is a good option for people who are looking to save on paying bills, shopping, eating out, or booking events and other services. It gives clarity on where you stand in terms of achieving set savings goals. For example, saving for a new house, for higher education, for medical emeiergencs and so on. An AU savings account is a good option for people who want to save for several life goals.

• A sense of security:

  Multiple savings account provides a sense of security. The money held in the bank is safe from any bad thing that might happen unlike in our pockets or homes.
• Another advantage of multiple savings account is ease of access. You can freely operate your accounts when many transactions are to be made in an emergency situation.

Cons -

Although multiple savings accounts offer a variety of advantages, every coin has its flipside.

• Minimum balance:

  Having multiple savings accounts is easy, but sometimes- it might get difficult to maintain the minimum balance on all these accounts.

• Loss of interest:

  Spreading funds into multiple accounts can result in loss of interest because many banks offer higher interest on higher deposited amount.

• Complications in auto-transfers: 

  The option of auto transfer can be complicated if all the deposits are made from one paycheck. It will be a difficult job to keep track of all the accounts and the amount deposited in them.

• Higher fee: 

  Some banks charge a higher fee on accounts especially when there is low balance in the account. It is important to check that there is no expense in having multiple accounts.

The main purpose of a savings account, be it single or multiple, is to encourage people to save. So, choose the accounts that will come to your rescue when you need it the most. Why wait, when you can earn and save!

Read more about the types of savings accounts and also know the current and saving account difference

Also, get to know more about the minimum monthly average balance and maintaining

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