How many savings accounts should you have

Savings account. How often have you heard these words? We all work hard to make sure our finances are safe. Many people achieve this goal by putting money into savings accounts. But the question arises: is it better to have more than one current account for your savings or is it better to have just one? In this article, we’ll go into more detail about savings accounts.

Why you should know about savings accounts

It is increasingly important in modern times to have multiple bank accounts because it provides a number of advantages. Besides, all banks have their own accounts with individual conditions and rates, and you are free to choose the most profitable deals from the banks as long as they meet your needs.

You can open specific accounts for specific purposes. For example, to save money for unexpected expenses or achieve a short-term financial goal. This approach not only adds variability to your finances but also ensures against a number of risks.

The difference between a savings account and a deposit

To make a deposit, you put cash into a bank account and follow certain rules. Some of the most important ones are a minimum opening amount, a fixed or conditional rate, and a short placement period. The deposit can either not be refunded or refunded, but there are some restrictions:

  • No cash withdrawals;
  • Limiting the level of the minimum deposit;
  • Limit the largest amount that can be replenished.

Most of the time, you can’t close a deposit before the due date and still save interest for the given period. When you opened the account, you agreed to put money in it for six months. If you had to close it early for some reason, the income will be calculated again using the demand rate. The rate of demand is not limited by law. This limit is up to the banks, but it’s usually between 0.01 and 0.1%. The demand rate is used to figure out interest on deposits and accounts that are closed before the due date.

The way interest is calculated and paid is another difference. When you open a deposit account, you can pick any contract term between one month and three years, depending on the bank. When this period ends, the deposit is automatically extended for another period, and interest is paid for the old period.

The savings account has no expiration date, and interest is accrued, as a rule, once a month. Rates can change based on demand and how well they work. Either 3% or 5% can be the real rate. On the first day of the billing period, it is added to the account balance. As long as the balance stays the same or the account isn’t closed, the extra interest will be added. If you put money down, the new settlement amount will be taken out on the first settlement day of the next month. According to the terms of the contract, the rate might go down if you take out your money.

Pros and cons of savings accounts

Different saving accounts provide a convenient method of saving money and even earning it, but there are also some inherent drawbacks that we need to be aware of. Here are some of the cons to consider:

  • Floating rate: Overall, savings accounts are not synonymous with the locked-in fixed-rate deposits that keep the same rate as long as the account exists, but their variable rate can change depending on what the bank decides;
  • Reduced rate: Banks may cut down the rate on the accounts with deposited funds which will lead to a decrease in the profitability of your savings;
  • Changing the conditions for calculating interest: Banks can revise the applying constraints for the increasing rate of the interest, which will make the savings account less attractive;
  • Need to meet additional conditions: Sometimes, to get the best rate, you need to meet certain conditions, such as a minimum balance or regular account replenishment;
  • Tax Implications: Taxation of the interests earned on the savings account may, in turn, erode your overall returns on the investment;
  • Limited access to funds: Some savings accounts may post a daily limit on the number of withdrawals allowed or charge fees for withdrawals;
  • Inflation: You can’t count on saving in a savings account to protect you from inflation if the rate, which is the cost of financing inflation, is below the inflation rate.

Challenges of managing multiple savings accounts

Making a choice between so many types of savings accounts appears to be a difficult task for many people. Both options would not be simple because every savings account is bound to have different terms of operation and features.

On the other hand, having multiple bank accounts, there are some benefits as well. First and foremost, by diversifying the investment options, your risk is spread out. You risk losing all your money if the company fails to carry out its business or becomes bankrupt. However, having over one account at different bank would let you balance your money and lower the risk.

Besides, as a result of more than one current account, you will be able to more effectively have different money objectives. You can devise your first account for short-term goals such as going on a holiday or buying a car, and the second one for long-term goals like raising the kids and going to college. This savings facility will help you to keep your saved money and also to see your progress on the money goals.


The number of savings accounts is determined by the individual’s needs and the nature of his financial standing. Our goal is that this article makes it easier for you to tell your account types apart from each other. Choose among the options that best fit you, but we see additional consultations with a specialist in financial consulting services as the optimal option. Specialist’s knowledge can be used to obtain information regarding the banking products you are interested in and therefore personally select the one that fits you the best.

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