Stories
More Bank Accounts: Smart Money Management or Unnecessary Hassle?
- •Having multiple bank accounts can be beneficial for managing different financial needs, such as salary, household expenses, and savings, but only if each account serves a clear purpose.
- •For most individuals, two accounts (one for daily transactions and another for savings/emergency funds) are often sufficient, with a third account potentially useful for specific needs like joint expenses or separate income streams.
- •Separating funds into different accounts can aid budgeting by reducing the temptation to spend money allocated for savings or specific goals.
- •The Deposit Insurance and Credit Guarantee Corporation (DICGC) covers eligible deposits up to Rs. 5 lakh per depositor per bank, meaning multiple accounts at the same bank do not increase insurance coverage beyond this limit.
- •Too many accounts can lead to administrative burdens, such as tracking multiple passwords and statements, and it's crucial to check linked services like SIPs or EMIs before closing an old account.
Key Questions Answered
There is no RBI rule limiting the number of savings accounts an individual can have, provided they meet the requirements of the respective banks. However, having too many accounts can become a nuisance to track and manage.
The Deposit Insurance and Credit Guarantee Corporation (DICGC) covers eligible deposits up to Rs. 5 lakh per depositor per bank, combining principal and interest. Opening multiple accounts within the same bank does not multiply this insurance limit, but using different banks provides separate Rs. 5 lakh coverage limits for each institution.
Before shutting an old account, you should check for linked services such as salary credits, SIPs, loan EMIs, insurance premiums, subscriptions, and utility payments, and move them beforehand to avoid trouble. It is also important to ensure nominee details are up to date.
