Sunday, June 26, 2022

What are the Disadvantages of having Multiple Bank Accounts?

Many people think that if they have more than one bank account, then they can keep their money in banks in a more secure way. But along with the advantages of anything, there are also disadvantages.

Having multiple bank accounts has some advantages but along with it, there are many disadvantages as well. Today we will talk about the disadvantages of having more than one bank account.

If you keep more than one bank account, then the biggest loss is financial loss. That is, the money you keep in banks for savings at a fixed interest. The same bank accounts can cause you financial loss too. Let’s see how?

What are the disadvantages of having multiple bank accounts?

Opening more than one bank account can lead to all these disadvantages. If there are multiple bank accounts, then you have to pay different charges or a certain amount according to the banks for each thing.

In which different types of charges are included,

  1. Minimum balance charges
  2. SMS charges
  3. Service charges
  4. Maintenance charges
  5. Debit, credit card charges, etc. 

Because each bank has its own different charges, whether it is a government bank or a private bank. If we talk about private banks as compared to public sector banks, then the penalty charges for not maintaining a minimum balance in them are quite high.

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Let us understand with an example, to maintain a minimum quarterly average balance (Min. QAB) if you have an account in Punjab National Bank (PNB), then you have to keep a minimum balance of Rs. 10,000 if you live in a Metro area.

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On the other hand, if you live in a rural/semi-urban, or in an urban area, then you have to keep a minimum balance of Rs. 1000, Rs. 2000, Rs.5000.

If you do not keep this minimum balance, then you have to pay a minimum balance penalty of one quarter around Rs. 400 for Rural and semi-urban areas, and Rs. 600 for urban and metro areas.

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Loss of Interest with Multiple bank accounts

The same we were talking about financial loss, so the biggest economic loss is to maintain a minimum balance in any bank.

Suppose you have an account in 5 banks and you have to maintain a minimum balance there. In such a situation, the minimum balance that you maintain in those 5 bank accounts, if it is calculated and kept in any one bank, then you can get a lot of interest on that entire amount per month or annually.

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Loss of time with multiple bank account

Along with this financial loss in form of interest, you may also have to face many problems while filing an income tax return.

If you keep separate bank accounts, you also have to keep the documents of all those bank accounts separately. Imagine any bank calls you to come in the bank for any kind of update related to your bank account along with the associated documents, then maintaining all required documents separately for multiple bank accounts is also a problem.

Because suppose you have accounts in different banks and you have to go every month for some update in all of them, then you have to bustle, and more and more important than that it will waste your valuable time. Wasting time itself is a big waste.

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