Grow Money with Multiple Bank Accounts

By- Akshay Sharma

Savings accounts, whether CDs, money market accounts, or high-interest savings accounts, are low-risk deposit accounts that you may use to grow your money for a variety of financial purposes, such as creating an emergency fund, paying off student loans, or preparing for a down payment.

Managing everything in a single savings account might get complicated if you have many financial goals and income sources. You may simplify your financial structure by having many accounts. This enables you to effortlessly distribute revenue from various sources to their proper accounts and check your overall financial health. Furthermore, it is critical to understand the distinction between salary and savings accounts.

Whether you're good or poor at handling your money, there's always space for growth. Establish two separate accounts for your spending and savings to help you meet your savings objectives while remaining on top of normal costs.

How Do You Have Multiple Bank Accounts?

Not everyone may find themselves intentionally opening multiple bank accounts, but everyone has reasons to have multiple bank accounts. You may end up with multiple bank accounts as you may not have shut down your salary account or opened another savings account for a home loan or Demat account.

If you also accidentally ended up with multiple bank accounts, you may have two options: keep or close them as they are. But before you decide on anything, weigh the pros and cons, especially when there are several benefits of having multiple bank accounts.

6 Reasons to Have Multiple Bank Accounts

1. Easy Transaction Tracking

On a daily basis, you may make a few transactions, whether it is about the daily expenses you need to meet, any other miscellaneous transactions, or even deposits to any government benefit account, pension account, or income tax payment. When you make all of these transactions with one account, it becomes difficult to keep track of them. Hence, when done from multiple bank accounts, you can easily track your transactions.

2. Reduced Chances of Overspending
   

Another benefit of having multiple bank accounts is your reduced chances of overspending. When you can keep track of the money in your bank account, you are constantly reminding yourself about the available balance in your account. This gives you access to judge how much you can spend on something. And to worsen things, you are also given access to the transfer button in the mobile apps, making it easier to carry transactions and spend on unnecessary things.

The "out of sight, out of mind" theory works well in these situations. When you have a separate savings account, you are less likely to use it for carrying daily expenses, eliminating the urge to overspend on unnecessary items.

3. Effortless Automation of Savings

Savings accounts have features to automate your savings through recurring transfers. This simplifies transferring your money from one account to another and eliminates the chances of your carrying the process manually, saving you time. It's easier to grow your money with multiple accounts by setting automatic recurring deposits in different accounts and watching them grow balance together.

1. Decreased Dependency on One Bank

Having multiple bank accounts can significantly reduce your dependency on a single bank, providing various benefits and increased financial security. This practice involves spreading your funds across different banks rather than relying solely on one institution, and having multiple bank accounts benefits by mitigating the risks associated with banking.

Banks can face financial difficulties, economic downturns, or even regulatory issues that might affect their operations. Having accounts with multiple banks makes you less likely to be heavily impacted if one of the banks encounters problems. Your assets are distributed, reducing the risk of losing access to all your funds at once.

2. Different Bank Benefits

No two banks will offer you the same benefits when opening a bank account with them. Having multiple accounts benefit you as each can yield varying interest rates and benefits. Depending on your financial goals and needs, you may open different types of bank accounts that give you different perks. For instance, savings accounts often offer modest interest rates and are ideal for emergency funds and short-term goals. On the other hand, high-yield savings accounts or certificates of deposit (CDs) can provide higher interest rates, making them suitable for longer-term savings objectives. You can optimise your returns by leveraging these varying interest rates while preserving liquidity.

3. Cost-Efficient for High-Usage ATM Users

Having multiple bank accounts allows you to take advantage of fee-free ATM networks offered by different banks. Most banks have their own network of ATMs where their account holders can withdraw cash without incurring any fees. By maintaining accounts with different banks, you can strategically use the ATMs of those banks to withdraw cash without incurring fees. This is particularly helpful for people with high ATM usage as it reduces the cumulative impact of ATM fees over time.

Conclusion

There are numerous benefits to having multiple bank accounts. From better organisation to tracking finances, it provides increased security of your funds and helps you grow your money rapidly. With all these advantages in mind, it is highly recommended to consider opening multiple bank accounts to optimise your financial management and security.