Ever heard the advice financial experts often give about not keeping all your money in one place? This concept is just as relevant when it comes to managing your savings accounts.
Although one account may be sufficient for basic needs like bill payments, fund transfers, and investments, it often falls short in many ways. These shortcomings include lower interest rates, difficulty in tracking multiple savings goals, risk of overspending, limited access to banking facilities, and fewer rewards, among others. Opening multiple savings accounts can address all these problems.
So, how many bank accounts can a person have in India?
There are no rules or guidelines about the number of bank accounts one can have. You are free to open multiple savings, current, or fixed deposit accounts at various banks. This benefit helps you diversify your banking relationships and fulfil different financial needs through separate accounts.
Benefits of keeping multiple savings accounts for different goals
A few advantages of opening multiple bank accounts are as follows:
1. Clear allocation of funds
Keeping multiple accountshelps you categorise your savings for different purposes, be it for an emergency fund, your child’s higher education, or a down payment on a house. You can monitor your progress toward each goal more clearly than if all funds were lumped together.
2. Customised banking features
Each bank has its own USP, such as higher interest rates, lower fees, premium digital features, or attractive cashback and rewards for savings account holders. By diversifying your savings across banks, you can customise your banking experience to optimise returns and minimise costs.
For example, when you choose the IndusInd Bank Indus Multiplier Max Savings Account, you get the flexibility of a bank account along with FD-like returns. Moreover, you enjoy additional benefits like:
- A 100% online bank account opening process
- Low balance requirements
- Cashback on all your spends
- Attractive offers on travel, fashion, and shopping spends
- Discounts on the best restaurants in your city
Open your IndusInd Bank Indus Multiplier Max Savings Account now! Get the growth and convenience your hard-earned money deserves.
3. Extended DICGC insurance coverage
In India, the Deposit Insurance and Credit Guarantee Corporation (DICGC) insures all deposits, such as savings, fixed, recurring, etc. The maximum limit is ₹5 lakh per depositor. By opening multiple accounts across different banks, you can extend this protection.
For example, if you keep ₹10 lakh in one bank, only up to ₹5 lakh is insured. However, by placing ₹5 lakh in a savings account at one bank and another ₹5 lakh at a different bank, you secure total DICGC coverage of ₹10 lakh. This strategy increases your insured limit and protects a larger portion of your assets.
4. Reduced reliance on one bank
Banks rely heavily on technology, which means that glitches or downtimes, although rare, can still occur. If you face a problem with an online transaction in one bank account, you can quickly switch to another account to continue your payments. Such convenience helps you make time-sensitive payments without any delay.
Ideally, how many bank accounts should a person have?
For every savings account, there is a different minimum balance requirement, fee, interest rate, and terms and conditions. To avoid confusion and complexity, most financial experts usually advise not to have more than three accounts per person.
A focused number of savings accounts, usually up to three, helps you manage your budget better, monitor suspicious activity carefully, and maintain necessary minimum balances without incurring fees. Beyond this, additional accounts might be beneficial if you have very targeted goals.
Can we have two accounts in the same bank in India?
Many banks allow individuals to open several types of savings accounts under one customer profile. This can be beneficial for managing various savings goals while keeping banking simple and organised. However, you should verify the policies and account limits with your chosen bank.
To sum up
Multiple bank accounts bring several benefits, such as better fund management, increased motivation to save, more financial incentives, and extended DICGC insurance coverage.
Even though the advantages are many, it is still advisable to weigh the benefits against the cost and analyse the practicality of handling multiple accounts. When you thoughtfully balance these aspects, it becomes easier to leverage multiple accounts to fulfil both short-term needs and long-term goals.