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What are the benefits of opening another savings account?
By AJ Virtuz 04 Jan 2021 863

It was just few days ago when we stepped into a new year, and it’s the best time to start managing all of your expenses and saving up for this year. Savings accounts are one of the best ways for people to set aside their extra cash. A good savings account keeps your money safe and also pays interest, which can help your balance grow over time.

The best way to ensure that you secure and build wealth, and avoid debt is to plan and save as much money as possible for both future needs and desires. Some financial experts recommend setting up a simple savings account tied to your payroll, while others advocate opening multiple accounts to be used for different savings targets.

“Having multiple accounts can be a way to keep yourself on task with the specific goals you’re saving for, without the risk of funds getting commingled,” said Greg McBride, CFA, Bankrate chief financial analyst.

There are actually good reasons to have multiple accounts that can be beneficial for your money.

 

Photo from Freepik

You can track your saving progress

It’s easy to keep track of your savings if you only have one savings account, but it can be difficult to keep track of your various savings goals. For example, you might want separate savings accounts for buying a new car, going on a vacation, and having some cash set aside for an emergency. If your emergency fund and your travel fund live in the same account, it can be tempting to raid your emergency savings in exchange for a few extra days at the beach.

 

You can receive multiple perks

While you may want a bank with an ATM near your home or workplace for convenience, online banks in the Philippines often offer better interest rates, and some institutions can also give you a bonus for opening an account. You may be able to take advantage of perks from several institutions if you open multiple accounts.

 

It can motivate you to save up

By being specific and tenacious about the goals you are saving up for, you can become more focused persistent to save up. When you see how close you are to reaching your goal, you’ll feel even more motivated to save. You can become more conscious with your expenses, assess your saving habits and adjust accordingly.

 

It can help you reduce the chance of misspending

If you have one savings account with a bunch of money in it, it’s easy to feel the temptation to spend it irresponsibly. Having all the money in one place also makes it easier to spend because you can access the funds with a single bank transfer conveniently. If you open multiple savings accounts, each account’s balance will be lower, which makes it harder to feel like you have extra money you can afford to spend. It also adds barriers to spending your money — especially if you have accounts from different banks.

 

You can reach your goals faster

It’s not a good habit when people spend all their money, and then whatever is left over becomes their savings — that won’t help you achieve your financial goals. The fastest way to save your money is to deposit it in different savings accounts as soon as you get your paycheck. Save first and then spend later. You’ll be surprised at how fast you can reach your financial goals if you keep multiple savings accounts.

 

It has been many years that you promised yourself to become wise with your savings — if you are highly organized and want to keep your funds for various needs and desires separate from each other, it may be a good option for you to open multiple savings accounts. However, just make sure you aren’t missing out on the perks of having a high balance with one financial bank or having fees eliminated because you have multiple accounts with one bank. You should also compare interest rates and fees on all accounts before you make your final decision.

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