Do You Prefer Having Multiple Savings Accounts?
Saving money can be tricky especially when you do not have the habit of doing it. Being someone with low wage, you may find it tough to stick on your savings plan. It takes time to build a good bank balance. Whether you want to save for the future or to go on the holiday, you have to save a substantial amount of money.
There is no denying that avoiding debts is the best possible way to increase your savings for both future needs and desires. At Everyone Loan, many financial experts recommend opening a single savings account will help you. On the contrary, a few believe opening multiple accounts for various targets is the best choice. Of course, you get confused what to do as each approach has pros and cons.
Things to Consider
Before considering the pros and cons, you should ask yourself two relevant questions related to your savings habits.
- Do You Have A Budget That Can Increase Your Savings?
If not, you have to create a budget even to save a tiny amount from each paycheck. Make a list of all your fixed expenses and fluctuating expenses. Plus, track your spending and cut the corners on your on the expense where you can to increase your savings.
- Do You Frequently Withdraw Your Savings for Irrelevant Stuff?
If you regularly spend more on irrelevant stuff than the fixed expenses, you may find it tough to save a ton of money every month. However, making efforts is all what you can do. Try not to withdraw your savings for non-emergency spending. If you are dipping into savings, it is a sign that you need to make a budget.
If You Want to Have Multiple Savings Accounts
Today, it is quite easy to open the multiple savings accounts online. You can access more than one savings account within a few minutes either with the same bank or with other financial institutions. Having the multiple savings accounts makes sense for the following reasons:
- You Can Spread Out Your Savings
You can keep some amount in other savings account so it can be available easily at the time of emergency. Keep the emergency funds in the account where you can access easily. This way you can easily meet your short term and long term goals without worrying about the unexpected expenses.
- You Can Have A High Balance Accounts
Some banks have limits. If you want to keep the high balance accounts, you can spread out the high balance to avoid the risk of exceeding the limit.
- You Can Withdraw Money Regularly
Usually, the savings accounts are limited to 4 or 5 withdrawals per month where you have to pay the penalty for the 6th transaction. To avoid this hurdle, you can have multiple accounts and enjoy making withdrawals regularly.
- You Can Have Multiple Savings Goals
Having multiple accounts will help you track exactly how much you have saved for each savings goal. For instance, if you want to save for winter vacations, then you can open another account apart from the older one. This way you can easily see how close you are to your goals.
Reasons You May Avoid Keeping Multiple Accounts
Despite the attractive benefits, there are several reasons you may avoid keeping multiple savings accounts. Below are the reasons that can compel you to keep your savings into one account rather than in multiple accounts:
- You May Face Difficulty in Maintaining Minimum Balance
Savings accounts require you to maintain a minimum balance. With a fixed income, you may face difficulties in maintaining a minimum balance in order to earn interest.
- You May Get Confused How to Manage Multiple Accounts
If you choose to have multiple accounts, you may face trouble in managing them in time. You have to make too much effort to keep yourself on track.
- You Have to Pay Higher Fees
If you are unable to meet the minimum balance requirement, you have to pay high charges. Make sure you are not getting trapped into a trouble by dividing your savings into multiple accounts.
Summarising the Above
If you are confused how to make the right financial decision, it is better to consider your current circumstance. Keeping the multiple accounts for your various needs and desires can be a good choice if you make sure to meet the minimum balance requirement. For better outcome, evaluate the interest rates and fees of various banks and then prefer to open multiple savings accounts.