Savings accounts are the best option for keeping your extra funds safe and earn some interest income on them. But is having a single savings account adequate? Or do you need to open a second or a third one? The answer to this lies in the fact that using a single savings account to carry out all your transactions may prove to be cumbersome. In many cases, putting all your funds in a single account may encourage you to overspend. In contrast, multiple or different types of savings accounts linked to different goals or purposes can prove to be better in terms of inculcating financial discipline in you.
Having several saving bank accounts will not have any impact on your credit score, so go ahead if you feel the need to do so. The best bank to open a savings account can be identified by checking the interest rate and other benefits being offered by it.
Here are some benefits of opening a second or a third savings account.
Track Your Progress for Different Goals
Savings accounts are used to park your spare funds which you may be planning to use for buying a new vehicle or going on a vacation or meeting any emergency expenses. The increase in the balance in your savings account may, however, motivate you to use all the funds for a trip or buy a bigger vehicle while leaving little for an emergency. To avoid such a situation, one can open more than one savings account for different goals.
Multiple accounts will ensure that you do not compromise on the achievement of one goal while fulfilling another one. You can easily track your progress towards achieving a goal by monitoring the balance of each account.
Take Advantage of Different Incentives
Banks offer several types of benefits to their savings account and debit cardholders. These limits are available on expenses of up to a certain limit. Having more than one account will allow you to take advantage of the incentives available on different accounts. Savings account interest rates may vary marginally from one bank to another. You can open another account to get a higher interest on some of your savings.
Different savings accounts have different per-day limits on fund withdrawal. But in case you need to withdraw more, you can do so easily if you have more than one savings accounts.
Special Incentives to New Bank Accounts
Banks often offer attractive incentives and bonuses to new customers. You can avail of these attractive offers by opening a new account and deposit the minimum balance mandated by the bank. The additional incentives can help you achieve your goals faster.
While multiple savings accounts are beneficial, it does not mean that you go overboard and open several accounts. Remember that you will need to keep a track of all your accounts, so go for that number only which you can manage easily. You will be required to maintain a minimum balance in each account and a failure to do so may attract penalties. Again, a bank may mark your account as dormant, if there is no activity in it for a long period.