Many Or Just One?

Discussion in Personal Finance started by Denis Hard • Feb 5, 2016.

  1. Denis Hard

    Denis HardWell-Known Member

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    An article I read suggests that you need numerous more than four savings accounts.

    1. Saving Account One — Emergency Savings.
    2. Saving Account Two — Miscellaneous expenses.
    3. Savings Account Three — Savings For Expensive Things You Need [new appliances, etc]
    4. Savings Account Four — Your Retirement funds.

    Does someone really need four savings accounts?
     
  2. gata montes

    gata montesActive Member

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    My thoughts here - although I can see how this method could prove useful for someone with multiple savings goals - are that I do think - as there are pros and cons to this method - that its something that would need careful consideration beforehand - if thinking of saving this way.

    For example - its worth bearing in mind that - those who have multiple savings accounts have been found - to spend more and save less than those who only have one account - the reason being - that as those who have a single savings account know exactly how much money they have at all times and because of that - are less likely to distort the account information to justify spending - single account savers usually tend to spend less and save more.

    Also not only is there the possibility of incurring extra fees with multiple accounts - but more importantly - it may prevent those savings earning a high rate of interest - particularly as the interest paid on small savings accounts is normally pretty low - as its generally only large account balances - that generate a higher rate of interest.

    To be honest - as there are so many different saving strategies flying around these days - as well as just as many mixed opinions as to which one is best and there is no one size fits all solution to saving - as everyone's personal circumstances differ - the best savings strategy in my mind - is the one that suits each person individually - as that is the one most likely to be successful in the long term.
     
  3. JosieP

    JosiePWell-Known Member

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    Not necessary for us, we're not spenders. If I were to do this, I could only see it being an excuse to spend.. or justify spending what's not allotted to those accounts. We have one pot.. we live off it and the rest stays to accumulate. Easy peasy.
     
  4. GemmaRowlands

    GemmaRowlandsActive Member

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    I have two accounts, as I like to have an account specifically to save for holidays, and the other account is to save up for the house that I am trying to buy. When I have my house, I won't need that account anymore so I will only have one. They can be viewed on my online banking app in the same place, though, so it's never a problem, but I just like being able to see the different amounts of money.
     
  5. thenextGeek

    thenextGeekActive Member

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    I have more than one savings account and I'm planning to add more in the future. The thing is, people with more than one savings account doesn't necessarily plan to just let their money rot in their banks. Instead, they use savings account to properly organize their money because having all your cash in just one account may be a recipe for disaster because you can't track down your expenses and income clearly unlike when you have them organized in different accounts. I have one for my retirement, while the other two are for my different businesses.
     
  6. xTinx

    xTinxWell-Known Member

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    I think one or two would suffice but then you have to separate your personal savings from your payroll account. Because I have lots of online gigs, I had little choice but to open a third account. It helps too and not much of a problem due to the that fact my third bank account only requires a small maintaining balance. My fourth account was merely an adjunct until I started using it to pay my insurance bills. That's the only bank my insurance provider had ties with and I had my bill auto-debited to my account every month. So far so good. Having 4 accounts don't bother me much.
     
  7. Parker

    ParkerWell-Known Member

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    I have more than a few subaccounts. It helps me to keep things straight. I am also a bit anal in my organization.

    I have an account for my contingency (emergency) fund, general savings, housing down payment, etc. I will be traveling to Peru later this year and will open a new account for it. I will be putting a little aside for my travel expenses and spending money.
     
  8. Corzhens

    CorzhensWell-Known Member

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    I have several bank account with specific purposes. First is my personal savings where the excess money, if there is, goes. Second is for the household use which handles the utilities and other expenses. The 3rd handles long term installments like the house mortgage and cars. And the last is for the sundry that covers other expenses and payments. I have separate accounts so it is easy to see if I have been overspending.
     
  9. Jamille

    JamilleActive Member

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    If you're earning income from diverse sources, it's typical to have three or four non-savings related accounts from different banks. Now, if you add in the savings account for retirement and emergency fund, and if you have an account in a foreign currency, it can easily grow to 8 accounts for one person alone. My son is not yet a teen yet he already has two accounts - one for his long term savings and another to keep the cash gifts that he intends to spend at some future time.

    One thing good about spreading your money in multiple accounts for different purposes is that you'll always think that you have to work more and save more because you'd see a lower bank balance for each goal/account. However, I don't feel like I need to keep an account for miscellaneous expenses or expensive purchases as I can just assign two of my payroll accounts for these purposes.
     
  10. Pravish

    PravishMember

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    I have always maintained only one bank account for all the purposes. In India, we have something called a Provident Fund, which is a percentage of your salary, which goes into the retirement funds every month and the same amount is contributed by the employer. (your contribution+employer contribution). So I do not have to make an effort to plan my retirement fund. If I need to buy a large appliance, I just take 12 month Interest free instalments and pay it month by month. All my utility bills are on auto pay with my savings account. Having just one account helps me when I file my taxes and keep a track on my spending. For emergency spending I, keep a fixed amount as a fixed deposit which can be liquidated anytime. when I do not need it, it keeps earning interest on my funds.
     
  11. morgoodie

    morgoodieActive Member

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    I have always only had one savings account and one checking account. Currently, I don't even have one savings account since I don't have any money to put in there. I just keep my money in a checking account that is linked to my debit card. I pay all my bills directly from my checking account. One of these days, I am hoping things will change and I will be able to open a savings account back up to put my money in.

    I can see how having more than one account can have its benefits. I am not sure if it would work for me as I like to have my money all together and it makes it easier for me. My retirement money I have in an IRA versus a regular savings account as some of the money in it is used to invest in mutual funds and a few other things to help grow my retirement money. I think having an emergency fund is important and could see having an account just for that though.
     
  12. harijobs

    harijobsActive Member

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    My opinion is that having two accounts is fairly enough, one for spending and other for saving and in that saving accounts we shall have the money which we will not take until a certain period of time. I think having multiple accounts will be tedious.
     
  13. annitha

    annithaActive Member

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    I have a few too many accounts plus some services with debit cards, but I am in g general dissatisfied with all of them. Why?
    Well, you keep your money in there, and they use all the transaction fees to feed their hungry banking system plus they also charge you for the 'maintenance of your account t'. I don't see what they need to maintain...
    So, with a few of these accounts and cards, I have additional expenses just to 'maintain' them, but these costs are not logical.
    I see no logic in four saving accounts unless you are insanely rich or you plan to hide your money before a divorce.
     
  14. Barida

    BaridaActive Member

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    @Denis Hard@Denis Hard Having numerous savings accounts is important if one needs to manage his finance wisely. An emergency account is specifically meant for saving funds that can be useful when there is an emergency such as sudden health issues and other issues that require a tangible amount of money. Saving account for expenses such as data subscription and call fees should fall under Saving account two while the other two, which is savings for expensive things you need and retirement funds, is self-explanatory.

    If we have numerous accounts, it is beneficial for us in the sense that we know how we spread our savings and also enables us to be frugal in spending. I have a friend that have up to six different accounts which are spread through serving different purposes. So, I do not think it is an unwise decision to have numerous accounts.

    I am planning to open an account that I will be saving some funds in just for purchasing goods from outside the country I stay in, that way, I can monitor how much I have spent on importing products from other countries.
     
    #14Aug 17, 2017
    Last edited by a moderator: Aug 18, 2017
  15. wallet

    walletActive Member

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    I don't think is necessary so many saving accounts, besides, we must pay a commission for every account we have in a bank so, I think the best thing is to have only one saving account and take the responsibility for this account. We must take care how we manage this account and how we spend the money, it just depends on us and not on storing the money in different accounts!
     
  16. tonyb

    tonybActive Member

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    I don't think all that many savings account are necessary, in my opinion a maximum of two savings account is okay. Take for example where you are expected to leave some money as maintenance in every account you own that would mean if you decide to go with many you may have to leave good amount of money to maintain them all. Well the two important savings account to me are, Retirement and Savings for the immediate.
     
  17. Shine_Spirit

    Shine_SpiritActive Member

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    I don't think this is as efficient as it seems to be. Particularly, I wouldn't have the patience to have to deal with so many separate saving accounts. It's something that doesn't really interest me.
     
  18. annitha

    annithaActive Member

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    I agree that a complex financial management is necessary in the case of the investments. In that case, it is much better if you have these things separated.
    I am still not thinking about the retirement funds, but it should be a top concern, and it is a self-explanatory thing.
    Still, many of the people I know are deep into the credits for the expensive things that they don't need.
    Many of them are coming into an age that their own children have to take over the credit obligation because the savings were not enough for the luxurious life they wanted for themselves.