Owning a savings account has now become a requirement for most working individuals. However, plenty of these individuals owns more than one single saving account. The reasons may vary, right from getting access to better account features, or as a part of the requirements for a job. No matter the reasons, here are a few pros and cons you can enjoy as a part of owning multiple accounts:
High ATM withdrawals: Most of the savings account comes with their daily ATM withdrawal limits, especially when it comes to free ATM transactions in a day and month. Each additional account you add to your profile, will be added to your total withdrawal limit. Therefore, additional saving accounts will allow you the perfect opportunity to distribute your bank balance across several accounts, and ensure that you get to withdraw more from ATM’s whenever you require it.
Higher branch transactions: The saving account charges a certain processing fee for certain products. They can include cheque clearing, cash deposits and withdrawals beyond a certain limit. With multiple accounts, you have the opportunity to distribute the transactions between several accounts, to reduce the overall banking costs. This is especially crucial if you make payments for purchases of mutual funds, insurance products, bonds and equity shares that are routed through saving accounts. This is also viable for any deposits you get through dividends, bonuses and redemption proceeds.
More offers on banking cards: As a part of the savings account, banking cards such as ATM and debit cards are offered. These cards come with cashback offers, discounts and reward points. By availing multiple accounts, you will be able to make a point of sale and online transactions, based on the best offers, available on your card.
Lower returns: You will need to maintain a minimum or average monthly balance in each saving accounts. This can not only differ from institute to institute but also the minimum amount. For example, the amount can be anywhere between Rs. 500 to Rs. 2 lakh. This, in turn, will offer you a low-interest deposit per annum, which can offer you a higher ROI if deposited in other financial products.
Non – maintenance charge: A non – maintenance of an average or minimum balance will attract non – maintenance charges. This amount can be anywhere between Rs. 1000 to Rs. 4000. Even free transactions will become chargeable due to non – maintenance.
Increased cost: Multiple saving accounts will lead to multiple cards. This, in turn, will increase the annual charges of the cards. It can amount to Rs. 100 to Rs 750 depending on the amount you have invested or the number of cards you have.
No matter the pros and cons of the saving account, you need to remember that no two financial habits will be the same. Therefore, to ensure that you get the best of benefits, without the disadvantages affecting you, you need to ensure that the account is fully utilised in the ways suggested above.