Multiple Bank Accounts: Alert for those having more than one bank account, know 5 big disadvantages..
Keeping more than one bank savings account can lead to monetary loss which people do not pay attention to. If the earning person is a salaried person, 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 work becomes easier as most of your banking details are available in a single bank account.
However, apart from convenience, you will also get some monetary benefits if you have a single savings bank account. Like you can save bank service charges levied on debit card AMC, SMS service charges, minimum balance, etc.
These 5 big losses can occur if you keep too many accounts-
Can be a victim of fraud-
Having more than one bank savings account means the account is likely to become inactive, with the highest possibility of fraud. This happens when a salaried person changes jobs from one organization to another, leaving the salary account there. In such a case, the salary account becomes inactive and as said earlier, such accounts are most prone to fraud.
Threat to CIBIL rating-
Having more than one savings account can make it difficult to maintain the appropriate minimum balance for your bank account. In such a case, even a single mistake resulting in 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 have to pay once, while in the case of more than one bank, the fee payment is doubled.
It is also necessary to maintain a minimum balance to keep a bank savings account. If you have multiple banks then there is a possibility of a large amount of money getting 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, your Rs 40,000 will be lost in maintaining the minimum balance in the two additional bank savings accounts.
This additional Rs 40,000 can be used for investment purposes and a return of 8 percent can be obtained on it as debt funds attract at least 8 percent in short-term investments. At the same time, in bank savings deposits, interest will be 4 to 5 percent, which is almost half of the amount earned through investment in debt funds.
Income tax fraud-
Bank savings account interest up to Rs 10,000 is tax exempt and hence TDS deducted. So, unless you are getting interest of Rs 10,000 in your bank savings account, your bank will not deduct TDS, but due to the number of bank savings accounts being multiple, it may happen that your bank does not deduct TDS from your single bank account. Due to this TDS has not been deducted.
Rs 10,000 does not earn interest in a financial year, but after adding the entire interest in all your savings accounts, it may cross Rs 10,000, making you liable for a TDS deduction. In such a situation, you will have to give this information to the Income Tax Department during ITR filing. Failure to do so will result in income tax fraud, which has happened unknowingly.
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