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Savings Account
3 reasons why you can benefit from multiple savings accounts
Key Takeaways
Use multiple savings accounts to save for specific short term goals so you do not dip into other funds.
- Spread deposits across banks to benefit from different interest rates and to avoid higher tax deducted at source when interest in a single account exceeds Rs 10,000.
- Open different types of savings accounts to access distinct features such as higher withdrawal limits, reward points, zero transaction costs, cashback and privilege deals.
- Keep your accounts well managed by closing or using inactive accounts to reduce fraud risk and stay organised when your job or banking needs change.
When it comes to determining how many savings accounts you should own, there’s no readymade number. The number of savings accounts you should hold will depend on your personal finances. With the right number of savings accounts, you will get to enjoy all the benefits and features that they will be offering.
Here are three benefits of holding multiple savings accounts.
More savings
Multiple savings accounts can help you save for short-term goals. One salary savings account is not usually enough to build savings. With multiple accounts, you can assign a budget or goal for each one of them. You can then accordingly deposit the money needed to meet the goal. This will prevent you from exhausting your resources and save more money. All you must do is not withdraw more than what you’d want each account to be depleted of. Ensure that all your accounts should ideally give high yields based on your goals so that you make the most out of your savings.
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Benefits of different interest rates
As per the Income Tax rule, tax is deducted at the source by the bank if the interest income accumulates above Rs. 10,000 per account. To avoid this deduction, you can put money in different banks to avoid paying tax on a large amount in a single account. Additionally, different banks have different interest rates. You could benefit from good savings account interest rate on your other bank accounts and make your money grow.
Access to different features
Based on your requirement, you can open different types of savings accounts that come with unique features. The highest interest rates can be enjoyed on your money invested in some of the best banks for savings accounts. Some bank accounts may offer debit cards with special features such as higher cash withdrawal limit, reward points, zero transaction cost, exclusive cashback on eligible transactions and privilege deals. You may not get all your desired features in a single account. To enjoy all features, you can open multiple savings accounts which offer respective features. For example, if you reach the withdrawal limit on one debit card of a bank, you could then use the credit card of your other savings account.
For holding multiple savings accounts, ensure that you open them with the best banks for savings accounts. Also, after opening several accounts, be systematic in its management. For example, with every job change, you might need to open a new salary account. In the long run, avoid ending up with inactive accounts on your hands. Non-operational accounts can draw the attention of fraudsters and closing them will help you avoid the consequences of frauds.
Disclaimer
The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirst.bank.in for latest updates.
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