Why You Need More Than One Bank Account And How to Use Them Wisely
In the world of daily financial needs, savings and investments, almost all of us are more or less associated with banks. However, many do not know how many bank accounts a common person needs and why it may be reasonable to have separate accounts. This question is not only important for personal financial discipline but also for building long-term wealth, managing emergencies, and meeting financial goals.
Nowadays, due to the ease of access to the banking sector, the spread of online banking, UPI transactions, and investment channels, having multiple bank accounts has become normal for many. However, what is more important than the number is having accounts used for the right purpose. Additional accounts not only increase the hassle, but can also increase the risk of wastage of money and security risks.
Bank accounts are mainly used for three purposes: daily expenses, savings, and investments. Having separate accounts for these three sectors can be beneficial for individuals. First, you will use one account for your daily expenses, such as buying food, electricity bills, mobile recharges, online shopping, or UPI transactions. This account can receive your monthly income, such as salary, and various urgent and routine expenses can be met from here. It is important that it is active and always has a sufficient balance.
Secondly, it is very effective to have a separate savings account for savings. You can deposit a fixed amount of money in this account every month and usually keep it out of daily transactions. Many people automatically transfer some money from the main account to this savings account, which develops a ‘pay-yourself-first’ habit. This type of account is very useful for long-term goals, such as buying a house, educating children, or preparing for retirement.
Thirdly, it is good for those who invest regularly to have a dedicated bank account. Only SIP (Systematic Investment Plan), mutual funds, stock market, or insurance premiums, etc., will be deducted from this account. Using this makes it easy to keep track of investments, budget planning is correct, and income and expenditure can be clearly stated while filing tax returns.
Many people ask, “So should a person have three bank accounts?” The answer is yes, if you want to bring discipline to your financial habits, then 2-3 separate accounts can bring speed to your life. However, it also requires effective management and conscious use. If you have many accounts, it is important to maintain their balance, avoid dormant charges, and prevent unwanted transactions.
Also, in some special situations, additional accounts may be required. For those who do business, it is mandatory to have a corporate or current account. Because if personal and business transactions cannot be kept separate, it is difficult to keep track of them later.
In many families, one member takes care of the finances of the entire family. In this case, having a joint account can be effective. This allows other family members to carry out banking activities in an emergency and makes family financial management easier.
Although multiple accounts offer many benefits, the risks of additional accounts cannot be denied. First, a certain minimum balance has to be maintained in each bank account. If it is not maintained, the bank may deduct service charges. Second, dormant accounts are vulnerable to hacking or fraud. If you haven’t used an account for a long time, it’s a good idea to close it. Third, monitoring multiple accounts at once is difficult and time-consuming.
Some people open multiple accounts at different banks to get offers, such as cashback, high interest rates, or credit card benefits. However, you should be careful not to damage your credit score or financial behavior while taking advantage of these opportunities.
From a financial perspective, it’s important that each bank account you have serves a specific purpose. If you can keep expenses, savings, and investments separate, your budgeting becomes much easier. You can get a clear idea of how much you’re spending on what, how much you’re saving at the end of the month, and how you’re preparing for the future.
Another important aspect of bank account management is digital security. It’s important to use a different and strong password for each account, enable two-factor authentication, and be alert to suspicious transactions. These security issues become even more important when you have multiple accounts.
Finally, there is no set number of bank accounts that a person should have. But in general, 2 to 3 savings accounts are sufficient—one for everyday expenses, one for savings, and one for investments or special financial management. Additional accounts can be opened as needed, but they should not get out of hand.
With careful management, awareness, and purposeful use, multiple bank accounts can help you maintain financial transparency and discipline. So review your bank accounts today—which ones to keep, which ones to close, and how to use them better.