Bank Account: Having more than one bank savings account can lead to monetary loss which goes unnoticed by the people. If the earning person is salaried, it is better to have a single savings bank account than to have multiple savings accounts.
According to tax and investment experts, maintaining a bank account is easy and when you are filing your income tax return, your job becomes easier as most of your banking details are available in a single bank account.
However, apart from convenience, there are some monetary benefits that you will get if you have only one savings bank account. Like you can save on bank service charges levied on debit card AMC, SMS service charges, minimum balance etc.
These 5 major disadvantages can be caused by keeping more accounts
Can be a victim of fraud
Having more than one bank savings account means the account is likely to be inoperative, with the highest probability of fraud. This happens when a salaried individual changes job from one organization to another leaving behind the salary account. In such a case, the salary account becomes inoperative and as stated earlier, such accounts are most prone to fraud.
Threat to CIBIL Rating
Having more than one savings account can make it difficult for you to maintain the proper minimum balance in your bank account. In such a case, even a single mistake leading to a penalty will directly impact your CIBIL rating.
service charge will increase
Having a bank account comes with various service charges like SMS Alert Service Charges, Debit Card AMS, etc. If you have a single bank savings account, you will have to pay once, while the fee payment doubles in case of multiple banks.
risk to your investment
It is also necessary to maintain a minimum balance for having a bank savings account. If you have multiple banks then there is a possibility of getting a huge amount stuck in your savings bank account.
These days, private banks are asking for a minimum balance of Rs 20,000 and if you have three such bank accounts in three different banks, maintaining a minimum balance in two additional bank savings accounts will sink your Rs 40,000.
This additional Rs 40,000 can be used for investment purpose and a return of 8 per cent can be earned on it as debt funds attract at least 8 per cent in short term investments. Whereas, in bank savings deposits, 4 to 5 percent interest will be given, which is almost half of the amount earned through investment in debt funds.
income tax fraud
Interest up to Rs 10,000 in a bank savings account is tax exempt and hence TDS is deducted. So, as long as your bank savings account is not getting interest of Rs.10,000, your bank will not deduct TDS, but due to multiple number of bank savings account, it may happen that your bank has deducted TDS for your single bank account. Reasons TDS not deducted.
Rs 10,000 is not the interest earned in a financial year, but after adding the entire interest in all your savings account, it may cross Rs 10,000, making you liable to deduct TDS. In such a situation, you will have to inform the Income Tax Department during ITR filing. Failure to do so will result in income tax fraud, which has happened unknowingly.
