Best Bank Accounts
Singapore is ranked one of the biggest savers in the world, but just how many bank accounts do you need? Managing all these accounts can be time-consuming and confusing, which is why many people want to streamline. It may seem simple – one bank account for daily expenditures and one account for saving. However, exactly how you handle your savings can depend greatly upon your financial habits
Reasons to Have Multiple Savings Accounts
You have multiple savings goals – one key reason to open more than 1 bank account is to ensure your new account is used for savings only. For others, it may mean opening individual accounts for each saving goals – en emergency fund, holidays fund or a joint account with your spouse. If these accounts are used for savings, you can set up an automatic transfer of funds each month from your salary account so that you do not need to remember to do it every month. By having the transfers scheduled, you will also not see the decrease in your salary account, which means you spend less automatically.
You want multiple perks – You may be able to take advantage of perks from several institutions if you open multiple accounts. With many sophisticated savings products these days, you may be able to earn step-up interest rates with incremental savings. Some banks also offer short term savings account with a higher interest if you can lock down a lump-sum for a fixed period of time. Look for these to maximise your dormant cash if you do not want to put them into fixed-deposit accounts which can affect your liquidity.
You want a joint account with your spouse – Some couples like the idea of having a joint account where they contribute their share of money to pay for shared expenses on house, holidays or a new car. This also makes paying for little expenses individually a breeze as you do not need to account to your partner for your spending patterns and allows breathing space.
Fear of bank run – while most of our bank deposits sit under the Deposit Insurance Scheme if a financial institution fails, our eligible accounts with that member are insured up to $50,000 only. If you are a high networth client with more money, you may want to separate your cash deposits under different banks to safeguard your wealth.
If you are super organised and want to keep your funds for various needs separate from each other, it may do you good to open multiple savings accounts. However, be sure you aren’t missing out on the perks of having a high balance with one financial institution so that you earn more interest. You should compare interest rates and fees on all accounts before you make your final decision.