The best way to ensure that you build wealth and avoid debt is to diligently plan and save as much money as possible for both future needs and desires. However, exactly how you handle your savings can depend greatly upon your financial habits. Some financial experts recommend setting up a simple savings account tied to your checking account, while others advocate opening multiple accounts to be used for various savings targets.
MoneyMindz.com, Best On-Call Financial Advisory Portal tells you the reasons of opening multiple savings accounts. Let’s have a look at them:
- You Have Multiple Savings Goals: The main reason to open more than one account is to track exactly how much you have saved toward each individual savings goal. For example, if you want to save three months’ worth of income in emergency account, set money aside for a down payment on a house, and fund your summer vacation, then you could open three accounts to see at a glance how close you are to reaching your goals.
- You Need to Separate Your Savings: You need to keep some of your money on lock-down so it’s available if you face an emergency. Consider keeping an emergency fund in an account that’s easily accessible, and then store the remainder of your funds in accounts tied to various short- and long-term targets.
- You Can Receive Multiple Perks: While you may want a bank with an ATM near your home or workplace, online banks often offer better interest rates, and some institutions give you a bonus for opening an account. You may be able to take advantage of perks from several institutions if you open multiple accounts.
- You’re Indecisive: You can try out different banks and credit unions for a while to gauge their levels of service.
- You Need to Make Withdrawals Regularly: Money market accounts and savings accounts are typically limited to six withdrawals per month. However, if you open three such accounts, you can withdraw money up to 18 times per month. Just be sure that the money you withdraw is being used for further investments or for applying to your specific savings goals – otherwise, you’re just depleting your accounts.
If you are supremely organized and want to keep your funds for various needs and desires separate from each other, you may be a good candidate to open multiple savings accounts. However, be sure you aren’t missing out on the perks of having a high balance with one financial institution or having fees eliminated because you have multiple accounts with one bank or credit union. You should compare interest rates and fees on all accounts before you make your final decision.
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