Should You Open Multiple Accounts To Protect Your Money?
The question for many people these days isn’t whether they should have more than one bank account, but how many bank accounts is best. Most people will get a bank account in high school or shortly after moving out of their parents’ house, but over the years people often find reasons to get more than one bank account. Making it more difficult to be susceptible to identity theft and a total loss of savings pushes many people to get more than one account.
Having more than one bank account offers advantages and benefits, and many couples and individuals have 5 or 6 accounts that might be held with different banking institutions. At a certain point, people tend to start wondering how many bank accounts they need, and whether having so many accounts is a safe way to hold the family’s money.
One of the reasons that some people will open another bank account is because they want to get a better interest rate on savings. Interestingly, research suggests that online banking usually offers slightly better rates for interest on savings accounts. However, most banks today don’t offer a tremendously higher rate than other institutions, so it might be a waste of time to open another bank account just for a better interest rate.
In addition, sometimes getting more bank accounts may make it more difficult for the account owner to keep up with all of the terms and conditions of each account. The fine print for bank accounts tends to be quite lengthy. Whenever a person decides to open a new bank account, making sure that all of the fine print and details have been read is necessary, but it can become confusing with half a dozen bank accounts.
Even if a depositor feels that opening a new checking account would be the safe thing to do, there are some advantages to sticking with just a single account. Managing just a single account takes a lot less time and it’s easier to keep track of that account, and whether it’s been hacked or not. It’s essential for a bank account holder to check on the account activity in his account frequently, but this can be a real hassle with a half dozen accounts. That being said, multiple bank accounts do have their place.
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Although a bank does have a responsibility to keep the funds in a person’s account safe, this doesn’t mean that all of the responsibility lies with the bank. An account holder must also check on the account on a regular basis to make sure that nothing strange has happened or that any mysterious debits have occurred. If a bank account has an unauthorized transaction that isn’t noticed for a few months, it could be very difficult to get that money back.
One of the reasons a person might want to deal with multiple bank accounts is when there is a small business which requires a bank account. Keeping personal accounts separate from a business account is a good idea. The Small Business Administration recommends that the safest way to operate a small business and its funds is to keep that money separate. A small business owner doesn’t want his personal funds to become liable for business costs.
In some circumstances, having more than one bank account is a smart move, but it does require extra vigilance to ensure the safety of the family’s money. Although multiple bank accounts could keep some money safe in the event of bank failure or identity theft, the prospect of a bank failing is quite remote.
Author Bio: Ryan Harris is a freelance copywriter and marketing consultant who works with small businesses and start-ups to design effective social media strategies to jumpstart brand growth. He has worked extensively with both B2B and B2C clients on marketing strategy with a focus on product introduction. He spends his free time reading tech news and supporting his favorite sports teams.