Having many accounts in different banks can provide better interest rates as well as other benefits. Here are some reasons why it is beneficial to have more than one bank account:

1. Savings are more secured.

Do not deposit all of your earnings into one account. Besides, do not use the same account that you use to pay bills and shop online. This is because you may be exposing yourself to a security risk, especially if the account is linked to a debit card that you use frequently. In fact, debit cards have less security features than credit cards.

It could be a good idea to set up a separate account for your online banking and debit card transactions. This allows you to conveniently deposit dollars every month. This could protect your savings from fraud or identity theft where only a fraction of your money is at risk, while the rest of your money is safe.

2. Deposit insurance coverage.

If your savings and deposits are in good shape, it might make more sense to spread your money out to ensure that your funds are protected. Only “up to RM250,000 per depositor, per member bank” is covered by PIDM, and this sum includes both the principle and interest earnings.

You will, on the other hand, be covered if you divide your money and deposit it in multiple banks to stay below the threshold.

3. Banks cannot reach deposit accounts.

This happens if you have a loan with a certain bank as well as a savings account or deposit accounts. Banks may have the right to charge the accounts with what you owe them.  If you default on loan payments or credit card bills, you could end up losing more.

For example, the bank could liquidate your accounts, even if they have not reached maturity. Meaning you could face penalties and lose interest earnings on top of your reduced savings.

4. Able to manage funds separately.

Keeping all of your money in one account may not be the most effective strategy to meet your savings goals if you want to save for a specific occasion or project. Because you would not be able to manage dedicated savings without the capacity to monitor the account as a whole, you’d have to manage the account as a whole.

Creating a separate account for a specific purpose could be a better approach to save money. Furthermore, to save more effectively, you can set up an automated monthly deduction from your primary account at another bank to your special higher-interest savings account.

5. Better strategies with banks.

Some bank perks are better than others. Some banks may provide higher savings rates, while others may offer better fixed deposit periods. Furthermore, different banks may provide credit card promotions that provide more appealing lending packages.

Having different bank accounts to be used on many occasions will definitely aid us on the go.

Conclusion

Hence, there is no danger in browsing around and comparing the benefits of several banks. Simply keep track of all your accounts. Allowing them to sit inactive and accumulating a negative amount will reflect on your credit record, which is bad for future reference.

Have you only got one bank account? Check out what the market has to offer in terms of savings and fixed deposit accounts so you don’t miss out on better rates and terms.

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