As you know, the key to growing your wealth is proper money management. This doesn’t only include saving for your future but taking advantage of opportunities to protect your savings, track your budgets, and build your golden nest egg(s).
Many independent money managers find having multiple accounts advantageous for the following reasons:
1. Smarter money management
Separating your daily transaction account from your savings account is essential to managing your spending from your savings.
I. Financial tracking
Bills, receipts and statements become much easier to track when you seperate your savings accounts from your main account. This way, you can simply calculate and track your daily to monthly out-going expenses.
II. Better budgeting
Locking-down a budget for shopping or a fixed emergency fund in separate accounts will ensure your spending won’t dip into your other budgets.
If you have long-term financial targets, setting up separate accounts for various budgets allows you to deposit funds from your main account. This can definitely help you achieve your targets faster.
2. Enjoy the benefits of multiple interest rates and promotions
Goes without saying – different banks have different interest rates with varying minimum deposits.
- Earn higher interest rates for bigger funds you won’t necessarily need in the short-term.
- Some banks allow fairly good rates for keeping a minimum deposit monthly
3. Enjoy multiple perks
Take advantage of the multiple perks and benefits from different banks and accounts:
- Various ATM accessibility and convenience
- Different ATM withdrawal limits
- Free subscriptions, discounts or freebies with new accounts
- Online shopping payment options and benefits
- Rewards and points for different purchases
4. Have an emergency account
Unexpected situations can happen and you want to have emergency funds at the ready.
As previously mentioned, some banks offer high-interest rates for keeping a monthly minimum. This means you can potentially earn more from your untouched emergency fund!
Keep in mind: to avoid spending from your emergency savings, you should limit your access by opting out of a card and limiting your withdrawal limit.
5. Saving for multiple financial goals
Possibly the biggest benefit of having multiple bank accounts is to manage multiple saving goals and track their individual progress.
For example, if you want to save three months’ worth of downpayment for a new home, an online course or a year-end trip to Japan, you may open 3 separate accounts.
Every month, you may choose to automatically deposit a fixed amount to these savings goals.
Here are some common goals you can start saving for:
- Emergency fund
- Retirement
- Online courses
- New computer
- New home down-payment
Cons of having multiple accounts
1. May be confusing to keep track
It can get messy managing money going in and out of multiple accounts so it may not be for everyone.
2. Fees, fees, fees
Unless you utilize all the benefits and facilities that come with each account, you could end up losing money through various fees.
Annual fees, ATM charges, and admin fees could add up to significant amounts, especially if some of your accounts have a low balance.
3. Minimum deposit requirements
In order to enjoy high-interest rates, it can be difficult to maintain the minimum deposits monthly. Many banks require at least a minimum of RM2,000 in order to reap the interest benefits.
So if you find yourself struggling to keep monthly deposits in multiple accounts, you might want to reconsider opening more than 2 (main account and your savings account).
Save for multiple goals with the HelloGold mobile app
Manually managing all your accounts is a messy task. Keeping all those cards in your isn’t very convenient either (who likes a bulky wallet or purse?)
With the HelloGold mobile app, you can forget all that hassle and enjoy the convenience of saving for multiple savings goals all in one place.
- Set up multiple monthly savings goals (from weddings and vacations all the way to a savings goal for your children)
- Track their progress individually
- Add new goals and cancel anytime
- Withdraw anytime
- No hidden fees
Find out more here
Start saving for multiple goals today
HelloGold is a mobile app that allows you to save gold from just RM1!
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Read more: How to choose the best savings account