Opinion: How to manage multiple bank accounts

In this digital age, savings accounts with different banks make sense, but it is not without its disadvantages.

Managing multiple bank accounts efficiently is quite a challenging exercise as we transit from physical banking habits to Internet and mobile banking in a world that is increasingly becoming digital, according to www.mydigitalfc.com.
Experts, however, advise banking customers to have only one or two accounts for operational convenience. They say it should be best left to individuals to decide as advantages and disadvantages of multiple bank accounts are still evolving. More so, we are tilting more towards Internet-based online and Automated Teller Machine-based transactions compared to physical banking.
Advantages and disadvantages
Having multiple bank accounts has its advantages such as cash withdrawal at ATMs. Therefore, having at least two bank accounts doubles cash withdrawal options. It also helps when a particular bank ATMs run out of cash or there is a limit on cash withdrawal amount per day.
Even in online transactions, having multiple bank accounts helps, especially when there is an operational issue linked to payment gateway or Internet connectivity.
The functioning in public sector may get disrupted due to a strike called by bank employees union, for instance. At this time, having another account in a private bank is like a boon.
Multiple savings accounts are also a well-informed way to play the higher yield game because you can shift money from lower yielding bank account into higher yielding bank accounts. Moreover, some banks do not ask for minimum balance and allow zero balance.
Multiple bank accounts also help in issuing pay orders when you suddenly find that there are not enough cheque leaves remaining in your chequebook. You will need at least three working days to get new ones.
Banks offer credit cards to their account holders are they are linked either to salary or to fixed deposits. With multiple bank accounts, one has more choice in selecting credit cards.
The flipside
Now, let us see the disadvantages of having multiple bank accounts. First, you would have to pay an annual maintenance fee and other charges every year for all the bank accounts. If you have one account, the fee is for just one.
There are also operational issues with multiple bank accounts. Internet banking requires managing, remembering or safekeeping of the login identity and the password for accessing the account for enabling online transactions. The more the number of bank accounts, the more complex it is to remember and safe-keep the password and four-digit PIN (personal identification number). One should avoid a savings bank account at banks with minimum balance fees as it often wipes out precious saving if it is left unattended due to lack of proper knowledge.
Banks charge a fee for failing to maintain the minimum balance.  One should have two bank accounts – one salary account and another standalone savings account.  If you don’t want to keep multiple bank accounts, the spring cleaning process has to be meticulous. This is because closing bank accounts should not be done in a hurry. Some accounts may be linked to future payments and closing one of them will surely invite trouble. We suggest one bank account. Over a period one should streamline; you cannot shut it off overnight.
A few people keep different bank accounts for different purposes. People may have multiple accounts for specific purposes like having a loan or owning a locker.
Many people feel having multiple accounts means spreading your risks. This is especially true when you lose your debit card or lose the secrecy of your bank account password. People also feel it is a way of saving some money for the long-term need while you manage your daily spends from the other account.
If you intend to keep multiple bank accounts, close the unnecessary accounts first after ensuring they are not linked to any future payments. Next, keep a detailed entry system for how you use the existing accounts. Tagging bank accounts to different purposes mean that you would automatically have a system where transactions don’t get mixed up.
In multiple accounts, it is difficult to explain credit and debit if proper trail is not maintained, as one is not able to explain the fund flow.
Opinion: How to manage multiple bank accounts Opinion: How to manage multiple bank accounts Reviewed by Abodunrin Muyiwa (Muyilight) on 17:55:00 Rating: 5

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