New Delhi: In a fast-paced life, and never-ending scenarios of income and expenditure, it is not uncommon for individuals to hold multiple bank accounts. In India, people generally hold two kinds of accounts- savings accounts and current accounts. However, oftentimes it gets burdensome to manage two separate banking accounts as it requires careful thought processes and proper planning.
In this piece, you will be coming across the pros and cons of holding more than one bank account.
Savings accounts and operating accounts are the two most common types of bank accounts, which prevails in the country. Saving accounts are used to help an individual save money; offering higher interest rates. while current accounts are formulated to manage users’ day-to-day expenses easily.
Pros
1. The process of tracking different types of transactions becomes smooth.
Looking after several kinds of transactions from a single account can be a bit tricky, however, having separate accounts might help in stress-free monitoring of the transaction.
2. Dependency on a particular bank shrinks.
Sometimes, you face problems with accessing one account, for which you can always transact through other bank accounts. This practice saves a lot of time and maintains the integrity of your work.
3. Economical for people having High-ATM-Usage.
Most of the banks in India offer a fixed number of free ATM withdrawals each month, and after every additional withdrawal, consumers get charged. This pertaining issue gets resolved or sorted out if the person is holding more than one bank account.
Cons
1. Regularly maintaining the average/minimum balance in each of the accounts.
Every single bank account has some minimum balance limit to maintain monthly. Failing to do so, can result in a pile of non-maintenance charges. Therefore, it becomes necessary to keep in mind maintaining minimum/average balance requirements in all your accounts.
2. Unfit the use of your funds.
Since it is mandatory to keep the minimum required balance in each of your accounts, your money will be blocked for the same, which in turn limits the opportunity of letting funds be used optimally.
3. Dormancy of Accounts
If you fail to actively use your accounts for more than two years, then as per the RBI guidelines, the bank is obliged to change the status of the particular account from ‘Active ‘ to ‘Dormant’.
Reflecting upon the advantages and the disadvantages of having multiple bank accounts brings a lot of financial challenges to a user. Hence, before opening another savings or current account, make sure that you assess your financial position.
