Can Opening Multiple Savings Accounts Help Maximise Your Savings?
Are you wondering if multiple Saving Accounts can be beneficial to achieving your financial planning goal? We discuss what benefits can come with various saving accounts and how to choose the right saving accounts.
A savings account is a safe place to park funds and earn interest. It is your first step toward financial planning. However, most people are comfortable with one savings account and do not see the need for additional accounts. Continue reading to learn about the advantages of having multiple savings accounts and how they can help you maximise your savings.How can having multiple Savings Accounts help you save more?
Individuals can now conveniently open new accounts and access financial services instantly through digital banking. In addition, you can open additional accounts for a specific purpose and easily transfer funds from your primary account to them. This is one method for keeping track of and achieving your life goal. Other ways that multiple savings accounts can help you maximise your savings are outlined below.
According to tax laws, interest earned on your savings bank account is taxable. However, you are eligible for tax deductions of up to Rs. Ten thousand on your total interest income from your savings account under Section 80TTA of the Income Tax Act. Creating multiple accounts in different banks is one approach to reduce tax outgo and save more. Thus, dividing your cash among various accounts is sensible rather than putting a significant sum in a single account and paying taxes.
Additionally, having savings account with different banks can help you get varied rates on deposits. This is because savings account interest rates differ among banks. So, before opening a new account, you must check and compare the savings rate online and establish an account with a bank that offers high rates. This will enable you to get better returns on your deposits.
Before you achieve your financial objectives, you must first define them. Then, you can fulfil your short-term goals by opening a new account for each target. So whether you're saving for a summer vacation, a down payment on your dream home or an education fund for your children, your goals and an account to fulfil your objectives must be clear.
This keeps you motivated to meet all of your savings targets. In addition, seeing each account increase month after month will help you stay motivated to save.
Depending on your needs, you can open many types of savings accounts, each with its own set of benefits. For example, some savings accounts may offer debit/credit cards with additional benefits such as no transaction fees, reward points, exclusive cashback on specific transactions, and privilege discounts. You may not be able to obtain all of the necessary benefits with a single bank account. As a result, you can open multiple savings accounts and take advantage of significant discounts on your online and offline purchases, maximising your savings.
Savings accounts are a popular investment option among the general public. It allows them to generate significant returns while also providing easy access to funds when needed. However, before opening a new account, you should compare various banks' online bank savings rates and select the one offering the highest returns.
