We tend to open different types of bank accounts for various reasons. It could be because you want to maintain your salary, savings, investments, etc. separately. There could also be an account for the various jobs you have done. If you have worked in other cities, there are chances you have your accounts in those places as well. The question here is, ca n you keep track of these accounts? Are they even useful?
Often, we tend to forget to close these surplus accounts. This is a matter of concern. In the post-demonetisation era, it is necessary to close the bank account that does not serve any financial purpose in your life.
Following are the reasons why you should close your surplus accounts right away:
1) Monthly balance: Every bank requires you to maintain a certain amount of balance in your savings account on a monthly basis. In rural areas, the limit is around INR 5,000- INR 10,000. However, the limit is higher in urban areas, i.e. INR 20,000 per account. This can lead to financial stress. Even public banks have imposed monthly balance limit off late. If you have zero balance in your salary account, it will turn into a savings account. The transition takes place within three to six months. Remember, banks can also charge a penalty for non-maintenance of the bank account.
2) Low interest: In continuation of the above point, handling several types of bank accounts could lead to you earning less interest. You can instead generate higher returns through mutual funds, fixed deposits, etc. To avoid lower interest, you need to close your old accounts and turn the money in them into investments.
3) Mis-usage of accounts: Before the fraudsters find a way to siphon funds from your account, you should shut the old accounts. People with multiple accounts usually do not pay attention to them regularly. And if any of the accounts have lump-sum money, it could turn into a loss for you.
4) Tax filing confusion: Managing too many bank accounts could complicate your Income Tax Return filing process. It is a task for the tax filer to go through all the bank account statements. If the tax filer finds issues with any of your accounts that even you are not aware of, it could lead you to trouble. So, minimise your accounts.
5) Impact on services: If you have not used your bank account for more than 12 months, they are deemed as inactive. And if it crosses beyond 12 months, then it turns into a dormant account. If your account becomes inactive, you cannot conduct any service with that concerned bank such as ordering chequebooks, making any transactions, etc.
So, simplify your financial handlings and have a consolidated bank account in place.
Often, we tend to forget to close these surplus accounts. This is a matter of concern. In the post-demonetisation era, it is necessary to close the bank account that does not serve any financial purpose in your life.
Following are the reasons why you should close your surplus accounts right away:
1) Monthly balance: Every bank requires you to maintain a certain amount of balance in your savings account on a monthly basis. In rural areas, the limit is around INR 5,000- INR 10,000. However, the limit is higher in urban areas, i.e. INR 20,000 per account. This can lead to financial stress. Even public banks have imposed monthly balance limit off late. If you have zero balance in your salary account, it will turn into a savings account. The transition takes place within three to six months. Remember, banks can also charge a penalty for non-maintenance of the bank account.
2) Low interest: In continuation of the above point, handling several types of bank accounts could lead to you earning less interest. You can instead generate higher returns through mutual funds, fixed deposits, etc. To avoid lower interest, you need to close your old accounts and turn the money in them into investments.
3) Mis-usage of accounts: Before the fraudsters find a way to siphon funds from your account, you should shut the old accounts. People with multiple accounts usually do not pay attention to them regularly. And if any of the accounts have lump-sum money, it could turn into a loss for you.
4) Tax filing confusion: Managing too many bank accounts could complicate your Income Tax Return filing process. It is a task for the tax filer to go through all the bank account statements. If the tax filer finds issues with any of your accounts that even you are not aware of, it could lead you to trouble. So, minimise your accounts.
5) Impact on services: If you have not used your bank account for more than 12 months, they are deemed as inactive. And if it crosses beyond 12 months, then it turns into a dormant account. If your account becomes inactive, you cannot conduct any service with that concerned bank such as ordering chequebooks, making any transactions, etc.
So, simplify your financial handlings and have a consolidated bank account in place.
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