How to manage multiple bank accounts

How to manage multiple bank accounts?

Though there is no limit for how many banks accounts one can hold, can you maintain multiple bank accounts? Some people have one savings account and one current account while some have more than half a dozen. While some people get different bank accounts to manage their income sources or investments, some people get it to enjoy the high benefits provided on these accounts like discounts at selected outlets, free cheque books, etc. Multiple accounts can even be accumulated in other ways like 

  • If your employer provides you with a salary account
  • If you have opened an investment account
  • There can be joint accounts 
  • Some banks offer loans or credit cards only if you have a savings account with them  
  • If you have a business then a business account 

Irrespective of how many accounts you hold, or the purpose of the account, it is all about how well you’ll be able to manage the accounts without getting baffled. There can be 3 options to handle too many accounts 

  • Either you close the accounts but closing an account with a negative balance can impact your credit score 
  • You leave it inactive but leaving it inactive can charge you high fees for non-maintenance
  • Or you manage them rightly

Manage multiple bank accounts

Segregating the income 

Firstly, you need to start with the basic concept “Budgeting”. If you can sort your income and expenses, you’ll understand what goes into which account. You can jot down the expenses like Savings, Fixed and Variable. Savings expenses like a retirement fund, emergency funds, saving for a bug purchase or travel, etc. Fixed expenses are for expenses like Rent, Utility Bills, etc. and variable expenses can be like expenses that you need to be prepared for financially like sudden medical expenses, repairs or travels, etc. 

Once you sort out expenses into these three categories, you can understand what account to be used for what. The simplest way would be having a separate account for fixed expenses, one for savings and one for variable expenses. After deciding the account for each category of expenses, calculate the total monthly amount for that particular expense like, what is the total amount of fixed expenses and accordingly transfer your funds to that account. 

Automatic Debits

After fixing an account for each expense type, you can take advantage of the automatic transfers option for certain expenses. You can turn on the automatic transfers options and transfer the funds to savings, pay bills, rent, and variable expenses account. This way you’ll know how much you are spending on each account and keep your expenses in control. 

Points to keep in mind  

Though having multiple accounts can seem to make your money management task simple, there are certain important aspects to keep in mind. 

  • Minimum balance – Not every account can be a zero balance account. Hence check the minimum balance requirement on the account and ensure you maintain that to avoid unnecessary charges. 
  • Fund Transfer Fees – Note the fund transfer fees that are being charged on the accounts. Hence while transferring funds to another account, add these fees and make the transfer
  • Some of the bank accounts come with certain discounts and rewards. Keep a look at the rewards and make use of them 
  • Ensure you don’t transfer funds from one account to another back and forth as there can be fund transfer fees charged 
  • While getting a new bank account make sure there are certain benefits provided like limited or unlimited fund transfers, low or no minimum balance requirement. 
  • Make sure not to keep the same password for all your online banking accounts 

Definitely, the more accounts you have, the more work it can be for you to handle it. Though the automatic debit option can make your work easy, it is important to keep an eye on the accounts once in a while to endure everything going as per your plan. Also, this is only for the ones who already have multiple bank accounts. People who are holding one or two accounts need not open separate accounts for each expense as it can be a pitfall if you are unable to manage the accounts.   

Meet the author
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Nikitha is a Senior Analyst at She has been writing about personal finance, credit cards, mortgage, and other personal finance products in the UAE. Her work on Mortgage loans has been featured by the GulfNews and other popular Financial Blogs in the UAE.







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