We can now open savings accounts online or through mobile applications with only a few clicks thanks to the country's rapid adoption of digital banking services. Online application, video KYC completion, and account opening may all be done quickly.
This simplicity has made opening multiple savings accounts at various banks simpler. You should be aware of the advantages and disadvantages of having various savings accounts.
Advantages of having several bank accounts
1. Offers with accounts
The majority of banks provide a variety of lockers, insurance, premium debit cards, and other benefits. In addition to these benefits, account holders receive points and reductions on purchases, EMIs, and utility bills. Thus, having various accounts can help you maximise your savings when it comes time to make purchases.
2. Less dependency on one bank
Banks now significantly rely on technology to provide you access to your money. You can always make purchases using other accounts if you have many accounts and run into accessibility issues with one of them. This guarantees that your work won't stall.
3. Economical for those who often use ATMs
Today, the most common way to withdraw money is through an ATM. Most banks limit the number of free ATM withdrawals each month to a set number. Any additional withdrawals incur charges. Having numerous accounts can help you save ATM fees if you need to withdraw money frequently each month because you can do so from several different accounts (different debit cards).
4. Separate account for online and/or UPI
Online and UPI-based transactions have grown over the past few years. This has, however, given fraudsters a new way to defraud you and access your account without your permission. For online/UP transactions, many consumers open a new account and deposit a small amount of money into it. This reduces the damages in the event of a password breach.
Multiple bank accounts have disadvantages
The following are some drawbacks of having numerous bank accounts:
1. Keeping each account's average or minimum balance constant
Every bank account should maintain a certain minimum balance. This need can be a dollar amount (such as a minimum balance of Rs. 1000 in the account at all times) or an average requirement over a quarter. Normally, failing to do so will result in a non-maintenance fee. If you have multiple accounts, you must make sure that each account satisfies the minimum/average balance criteria.
2. Poor management of your funds
Your money will be restricted because each account must have a minimum balance to remain open. As a result, you won't be able to use your money as effectively.
3. Issues relating to the dormancy of accounts
According to RBI regulation, the bank must alter the status of your account from "Active" to "Dormant" if you haven't used it for more than two years. Any services connected to this account will end as a result, and the bank may impose penalties or costs as a result.
Additionally, inactive accounts serve as a haven for criminals who use them to conduct illicit business.
4. Managing and keeping track of all accounts
Keeping track of various account statements, keeping your contact information up to date with all banks where you have accounts, and making the best use of each account's services are all required when you have many accounts. This can take a lot of time.
