It's okay to have more than one bank
Banking has become real easy and customers can take advantage of all the benefits on offer. One of the benefits is having multiple bank accounts; as different banks have different options for interest rate, fees, and balance limits etc., keeping many accounts can help use the best that each bank has to offer.
Listed below are some of the advantages of having more than one bank account in different banks.
- It can be very helpful if there is a system outage in one of the banks. Your access to funds will not be restricted as you can easily take out emergency funds from some other bank account that you have.
- Creating an emergency fund is one of the most important aspects of proper financial management. You can thus open a different bank account that is used solely for the purpose of depositing money into an emergency fund. Such an account and its cash will be easily available to you as and when you require it during an emergency. It will also remain safe and secure in the bank.
- Financial prudence mandates us to have varied savings goals. For example, you can have a goal to save for home down payment, buying a car, going for a vacation, sending kids to college, etc. Having a separate account to save money for such savings goals ensures that you gradually work towards saving that amount for that specific goal.
- It may be noted that the Federal Deposit Insurance Corp (FDIC) insures bank deposits only up to $250,000. Thus, people who have deposits of over $250,000 may open up new bank accounts and spread the excess savings into such new accounts so as to make sure that none of their deposits remain uninsured.
- One of the perks of big banking is the availability of an ATM near your office or home. But there are many additional incentives offered by online banks such as bonus for opening a new online account, higher rates of interest, low fees, etc. Hence, you can open up a new online bank account to take advantage of all such perks that are not provided by giant banks or credit unions.
- FDIC insurance will reimburse the amount that you had saved in the bank if the bank fails. However, such reimbursement often takes some time to complete. Thus, having an account in more than one bank can help protect you from not having access to funds when you need it when the bank that you bank with goes under.
- Different bank accounts can also be maintained for different household purposes. You can open up a bank account wherein the paycheck of the husband gets deposited and the money in that account gets used for payment of monthly bills. Another account can be used for depositing the paycheck of the wife and its funds can be used for buying groceries and other household expenses and/or for making some major purchase.
- You can transfer money from one account with low interest to another with high interest, with the fluctuations in interest rates in different banks. This can help you earn and save more in interest.
- Having multiple accounts can help safeguard against fraud. If one of your accounts gets hacked, then you can be rest assured that your other accounts and the money in them are safe.