Disadvantages Involved in Having Multiple Bank Accounts

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Despite many advantages of having multiple accounts, there are some disadvantages too. So, before having multiple accounts one needs to consider the cons as well.

Minimum Balance

If you have savings account, then you need to maintain minimum balance in the account. It is not that difficult if you have a single account but since you are having or planning to have multiple accounts it can be hard as you have to lock money to maintain the minimum balance. If you fail to maintain minimum balance then an amount as stipulated by the bank will be debited from your account.

Prone to identity theft

In case you have multiple accounts, chances are high that you may lose interest in some account and may even forget about it. Dormant accounts are the most vulnerable to forgeries.So, do make sure you are tracking all bank accounts.

Managing the account is difficult

Sometimes managing the accounts, including deposits, checking balances, getting statements could be a hassle.

Multiple Login

Keeping track of all the accounts can be cumbersome, and there are chances that you may forget the login details or misplace cheque book of an account. More, is not necessarily merrier.

Tax Time

Filing income tax can be confusing if you receive money from numerous accounts. For the purpose of tax returns a sum of Rs 10,000 as interest income from SB Account is tax exempt. You have to compute and calculate multiple bank account interest, which is cumbersome.

Multiple cards and cheque book

If you carry multiple cheque books and debit cards there are chances of misplacing and there are some banks which charge for debit cards. So, every year you have to bear the charges towards a debit card.

May tend to lose interest

Many banks give interest rate in SB account of more then 4 per cent, if you maintain a certain balance. By splitting money in between different bank accounts, you may lose on interest amount.

Who can Have Multiple accounts?

If you are well organized person and believe in managing your finance in a controlled manner then you can consider this option. If not, one should be very careful and use multiple accounts or else there are higher chances that you may lose money without knowledge.

Read more about: banking
Story first published: Friday, January 9, 2015, 9:18 [IST]
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