When it comes to opening a savings account, the first factor you will consider is rates. Normally, we associate a higher interest rate for a good choice. However, contrary to that belief, having one account will only comprise your financial expenditures.
No doubt opening and managing a single account will seem convenient. However, imagine using this account to save for all your bills, additional luxury financial expenditures, emergency funds and other similar expenditures. Now doesn’t it seem better to open multiple accounts? Here are some reasons as to why you should hold multiple saving accounts today:
Focus on saving for multiple goals:
You and your friends have planned an international trip at the end of the year. Suddenly you realize you need to save up for your insurance renewal. Without realizing it, you may end up taking a part of your funds delegated for your insurance renewal to book early bird tickets for your trip, only to realize you don’t have sufficient funds for the renewal. With a savings account, you can focus on one goal at a time. In order words, you can plan for the renewal of your insurance AND go for your international trip too.
Keep a track of your goal:
While you may be a master at multi-tasking, it can be quite difficult to keep track of long-term financial goals. This is especially difficult if you keep using the funds from your single savings account to satisfy all your financial requirements. In the end, you will be wondering exactly how many bills did you pay, to end up with such a low savings? Instead of leaving everything to your bank statements as a reminder, you can set up separate saving accounts for specific purposes. You can even set up the account to send you alerts for deductions or any transactions made to help you keep track of the funds in each of the accounts.
Keep track of how much you are investing:
With a savings account, surely you will be investing a small amount on a regular basis. However, if you are investing funds for multiple goals at the same time, you will only be investing an amount that, when dived for each goal, will amount to a small figure. In other words, you may end up spending literal years, just so you can collectively satisfy the goal for that savings account. When you break down your goals into separate saving accounts, it’s much easier to see your progress and how far along you really are.
Apart from these reasons, there are plenty more. However, by now you will be aware how beneficial multiple savings account can be to you.