A savings account is a type of money account that you can open with a bank. Savings bank accounts help us keep our money safe and liquidate it when needed. Although, with so many banks , customers might get confused as to which bank account is best for them. For that, you need to do research work and compare the banks. To reap maximum benefits, you can now open more than one savings account.
Are you allowed to open more than one savings account?
Amit Gupta, MD, SAG Infotech says people in India can open and maintain multiple savings accounts with different banks.
Though there is no limit to how many savings accounts you can have, it is advised to have no more than three accounts per person, for it can be difficult to manage many accounts, Amit Gupta said.
“There is no fixed number of how many bank accounts you should have as it totally depends on YOUR FINANCIAL GOALS. I believe that having multiple bank accounts and positioning each bank account with your objectives can help you really acuminate in achieving your specific goals. Hence, it will be effective in giving greater clarity and seeing more wins than you’ve seen before. So, having more than just one account is definitely a smart move,” said Saif Ahmad Khan, CEO at Luhaif Digitech
Multiple accounts can help you separate spending money for savings and household expenditures.
“I have joint accounts with my wife and another account with my child. This way I can allot money for travel expenditures and for my child's yearly spending. It helps in keeping your finances organised while getting the full benefits of banking,” sais Tarundeep Singh, Chief Growth Officer at The 23 Watts.
Amit Gupta explains why having multiple savings accounts can be a good thing for you:
1) Efficient management of finances: You may have different financial goals, such as the child’s education, emergency fund, monthly expenses, and so on. Having separate accounts for each goal will make it easy for you to maintain and track your savings for different goals. It will also reduce the chances of misspending your savings.
2) Automated saving for goals: After setting up different accounts for different goals, you can also automate the transfer of funds from your main account to other accounts on a scheduled basis (on the 1st of every month, for instance) to ensure you only spend after you have saved for your goals.
3) This will make it easy to manage, monitor and keep track of your finances while saving for various goals.
4) A debit card has a specific withdrawal limit and might not allow you to withdraw a lot of money in case of emergencies. Different savings accounts can offer you multiple debit cards, which you can use in such cases.
Insurance cover
Chartered Accountant Rajender Wadhwa says total insurance cover in the worst case is 5 lakh per bank account now a days which was 1 lakh earlier. So, you are reducing the risk of bad debts in the case bankruptcy of bank.
FAQs
Spreading your money out across different savings accounts from various banks could help you take advantage of higher interest rates. For example, your brick-and-mortar bank may pay a lower APY for a regular savings account versus a high-yield savings account at an online bank.
Is there a benefit to having multiple savings accounts? ›
Having your savings allocated toward multiple goals allows you to easily monitor your progress toward reaching them. If you have a down payment, summer vacation and three months' worth of income funds, you simply have to open all three accounts to visually see how close you are to your target amounts.
Is it beneficial to open multiple bank accounts? ›
What are the benefits of multiple bank accounts? Multiple bank accounts can help you organize your money, set goals and earn interest. Some banks also reward customers for having several accounts by waiving fees, allowing for easy transfers between accounts and offering higher interest rates.
Is it good to have more savings account? ›
But you don't have to limit to one account as multiple Savings Accounts can enrich the way you manage your finances. - Debit Cards linked to some Savings Accounts have a per-day limit on fund withdrawal. So, having multiple accounts comes in handy when in urgent need of cash.
Is there a disadvantage to opening multiple bank accounts? ›
On the flip side, here are some potential drawbacks to consider: Keeping track of your money: More accounts mean more numbers to monitor, which can complicate your financial oversight. Higher risk of fraud: The more accounts you have, the more potential entry points there are for fraudulent activities.
Is 4 savings accounts too many? ›
The short answer to this question is as many as you need. But the actual answer depends on how many different savings goals you're working toward. For example, your list of savings goals might include: Planning a vacation.
Should I keep more than 250k in one bank? ›
Bottom line. Any individual or entity that has more than $250,000 in deposits at an FDIC-insured bank should see to it that all monies are federally insured. It's not only diligent savers and high-net-worth individuals who might need extra FDIC coverage.
Should I split my savings between banks? ›
Having multiple savings accounts can be beneficial for keeping track of different savings goals, taking advantage of different interest rates, and ensuring your savings are fully insured by the FDIC.
Is it safe to keep all your money in one bank? ›
If you have more than $250,000 at one institution, you may still be covered by federal insurance, but if not, or if you just want to take advantage of high interest rates or other perks, you may want to consider opening accounts at different banks.
Which bank is best for savings accounts? ›
Institutions such as HDFC Bank, ICICI Bank, and State Bank of India (SBI) are known for their attractive interest rates and substantial branch networks. Kotak Mahindra Bank is known for its digital financial services, whereas Axis Bank provides flexible savings alternatives.
How much is too much? The general rule is to have three to six months' worth of living expenses (rent, utilities, food, car payments, etc.)
Is 100k too much in savings account? ›
A $100,000 savings account balance is fine if it aligns with your goals. But it could be a red flag if you don't need that much money there.
Is it illegal to have two bank accounts with different banks? ›
Can I open checking or savings accounts with more than one bank at a time? Yes. There are no restrictions on the number of checking and savings accounts you can open or the number of banks or credit unions with which you can have accounts.
Is it smart to open multiple bank accounts? ›
Multiple accounts can help you separate spending money from savings and household money from individual earnings. Tracking savings goals. Having multiple bank accounts may help track individual savings goals more easily. Separating finances.
How many bank accounts are too many? ›
There is no limit to the number of checking accounts you can have. But it's a good idea to limit the number of accounts to an amount that you can reasonably and sustainably manage. Too many checking accounts can make it harder to track deposits and withdrawals.
What type of savings account is the best? ›
Traditional savings account: Best if you want to bank in person. High-yield savings account: Best if you want to bank digitally. Money market account: Best if you want a debit card or paper checks tied to your savings. CD: Best if you're comfortable not touching your money for a long time.
Is there a penalty for having multiple savings accounts? ›
There's no limit to the total number of savings accounts you can have across all financial institutions, but some banks set limits for their customers.
Does opening another savings account affect credit score? ›
Accounts are insured by NCUA for up to $250,000. But maybe you're still wondering, does opening a savings account affect your credit score? The simple answer is no.
How much should you have saved by 30? ›
If you're looking for a ballpark figure, Taylor Kovar, certified financial planner and CEO of Kovar Wealth Management says, “By age 30, a good rule of thumb is to aim to have saved the equivalent of your annual salary. Let's say you're earning $50,000 a year. By 30, it would be beneficial to have $50,000 saved.
