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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.
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.
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 higher interest rates on your other bank accounts and make your money grow.
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.
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