Why You Should Avoid Having Too Many Bank Accounts?

Without a bank account, life can be financially miserable, but having too many bank accounts can also make your life financially miserable. Do you want to know why?

Amit Sethi
September 27, 2023
Multiple Bank Accounts

Multiple Bank Accounts

Bank accounts are necessary for everyone and very much essential for senior citizens as well. Having one or two bank accounts often serves the purpose; still, some people maintain too many bank accounts. Having many bank accounts can make it financially challenging for senior citizens. Let’s find out why senior citizens should avoid having too many bank accounts.


Unnecessary Balance Lying Idle In Various Accounts

Nowadays, banks require every account holder to maintain the requisite minimum balance in the bank account to avoid the penalty. The minimum balance requirement usually varies from bank to bank, depending on location and category of bank account. For example, the bank account in metropolitans may require a higher minimum balance than in a small town. Similarly, the higher category bank accounts often require a bigger minimum balance to be maintained in the account. Keeping a minimum balance in several accounts can collectively make it a huge sum, and senior citizens who usually live on restricted income sources can get more cash flow if they reduce the number of bank accounts.

Difficult To Track Charges

When you maintain multiple bank accounts, it can be difficult for you to notice the charges levied by your bank from time to time. For example, if you have availed the facility of a debit card in your bank account, it can come with an annual fee and a certain transaction fee. You can know about such charges only by looking at your bank statement. However, with multiple bank accounts, it can be difficult for senior citizen account holders to keep track of all the accounts.

It Can Be Painful While Filing The ITR

While filing the ITR, it’s necessary to furnish the details of all the bank accounts maintained by the taxpayer. Also, transactions in each bank account need close scrutiny to avoid a mistake. With too many bank accounts, it can be a cumbersome process to go through bank statements and check all the transactions in each account.

Burden On Legal Heirs

Senior citizens may not want to put their legal heirs through the lengthy and painful procedure of closing several bank accounts after their demise. In many cases, people forget to reveal their bank account details to their family members or mention it in their will. A huge sum of unclaimed deposits lying with the banks in India is the proof.

Having up to 2 or 3 bank accounts can benefit you from getting more offers and discounts from the banks. But, having too many bank accounts must be avoided, especially if you are retired. More account means greater effort towards their maintenance and security, which senior citizens may not want to get involved in.

The author is an independent financial journalist

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