As much as it is important, it is equally difficult to inculcate the habit of savings in an individual. Every individual has a different reason for savings, but with adequate financial planning and the right saving habits, people can achieve their long-term financial goals with ease.
A number of financial institutions offer schemes that motivate individuals to save and invest their funds. Whatever the reason behind savings, it is important to park them into a return-generating account.
Benefits of multiple savings accounts
Opening and maintaining a savings account is a quick and hassle-free process. However, the ideal way to save money is by opening multiple accounts which will make it easier for anyone to save and keep a track of the amount as well. Some of the primary benefits of opening multiple accounts are as follows:
- Helps meet multiple goals
No individual has a single financial goal. With multiple savings accounts, it becomes easier to keep a track of the amount saved for different purposes. For instance, if you need to save money for an international travel, for annual school fees of your child, and for your car Equated Monthly Installment (EMI), it is best you open three different accounts and save the respective amounts in them.
- Helps separate savings from expenses
Individuals can take charge of their expenses by setting aside a specific amount in an account and transferring the rest into their savings account. Multiple accounts can do the trick. The amount for monthly expenses should be maintained in the current account so that the other account remains undisturbed. The current account should have adequate funds and the balance should be shifted to the savings account.
- Helps build up a contingency fund
An unforeseen emergency may arise at any time. It is better to be prepared for such situations. An emergency fund is built up for contingencies; hence it should remain untouched until the goal is achieved or an emergency arises. Individuals who are organized and are working to create such a fund can choose multiple savings accounts. It will help them in the long-term achievement of their financial goals and will ensure that one does not simply use up the idle funds for every financial requirement.
Even a single account is beneficial, but multiple saving accounts act as a motivating factor and offer security during a financial crunch.