Contrary to popular belief, having multiple bank accounts is not a sign of opulence, but is a financial burden. Most people aren’t aware of it. If you are a salaried person, having a single or two bank accounts is preferable.
Maintaining one or two bank accounts, according to experts, is simple, and it makes your job easier when it comes to preparing your income tax return. When majority of your banking information is stored in a single bank account, you’ll have to pay lesser bank service charges, SMS service charges, and a minimum balance, among other things. Here we are listing 4 drawbacks of having multiple bank accounts.
Vulnerable to frauds:
Having many bank savings accounts raises the likelihood of one being inactive, which increases the risk of fraud. This frequently occurs when a salaried employee leaves one organisation to work for another. In this instance, the salary account remains inactive and such accounts are the most vulnerable to frauds. These accounts are the prime targets of scammers.
Affects CIBIL:
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You may find it challenging to keep a healthy minimum amount in your bank account if you have many savings accounts. A single lapse in this maintenance can result in a penalty that is directly tied to your CIBIL rating. It’s possible that your CIBIL isn’t up to par.
Multiple charges:
Having a bank account comes with a slew of fees, including SMS alert fees, debit card fees, and so on. If you have a single bank savings account, you will be have to pay lesser amount. However, if you have multiple bank accounts, you will be responsible for all of them. Having multiple savings accounts increases the amount of service costs owed.
Opportunity cost:
In order to hold a bank savings account, you must also maintain a minimum amount. If you have several bank accounts, you are likely to keep a significant sum in your savings account. Many private sector banks now require a minimum balance of Rs 10,000, so if you have three or four such bank accounts in, you’ll need Rs 30000 to 40000 to hold all the time. This additional money can be invested for a return of 8-12%, as debt funds provide at least 8% returns on short-term investments and good equity instruments provide interest much higher.
What to do?
You should shut all the extra accounts that are no longer in use. You can avoid a variety of issues by doing so. To close the account, you must complete a de-Link form. You will obtain an account closure form from the bank branch, which you will complete and submit in order to shut your account.