Why You Should Do Business With More Than One Bank
Author Avatar

 

It’s true that one could lose on interests if their savings are split between banks. But this does not have to be the case, in fact, having multiple accounts could actually earn you better interests in addition to other perks.

Here are the reasons why you might want to consider having more than one bank account:

1. Protect and Secure Your Savings

If all the money you earn goes into one account – the very same account that you pay bills and shop online with, you might be facing a security risk. More so if this account is attached to a debit card which you utilise often since these tend to have lesser protections than credit cards.

Why You Should Do Business With More Than One Bank

It might be a good idea to have a separate account for your online banking and debit card uses, for which you can easily deposit funds every month for these purposes alone. This might protect your big bucks from cases of fraud or identity theft where only a portion of your money is vulnerable, leaving your main account secured.

2. Avoid Banks From Dipping into Deposit Accounts to Offset Borrowings

If you have a loan with a certain bank as well as a savings account or other deposits with them, they may have the ‘right to set-off’ what you owe them. You could end up losing more than just your savings if you default on loan payments or credit card bills.

For instance, the bank could liquated the deposits you have with them, even ones that have not yet reached maturity – meaning you may incur penalties and lose interest earnings on top of your diminished savings.

3. Maintain Deposit Insurance Coverage

If your savings and deposits (e.g. fixed deposits, savings and current accounts, etc.) are very healthy, it might make more sense to spread your money to maintain insurance coverage for your funds. PIDM only covers “up to RM250,000 per depositor, per member bank”, and this amount is inclusive of the principal amount and its interest earnings.

On the other hand, you will be covered if you divide your money to remain below the threshold by depositing in different banks.

4. Reach Separate Saving Goals

If you want to save for a special occasion or project, keeping all your money in one account may not be an effective way to reach your savings goals. This is because you would have to monitor the account as a whole without the ability to quickly track dedicated savings.

Opening a separate account for a single purpose might be a better way to accumulate your savings. What’s more, you can set up an automatic deduction from your primary account in another bank to your ‘special’ higher interest savings account every month to save more successfully.

5. Enjoy Better Perks

All bank perks are not created equal, some may actually be better than others. Bank A may offer higher interest rates for savings while Bank B offers enhanced terms for fixed deposits. Also Bank C may have credit card promos that are more your speed or offer attractive loan packages that interest you.

Thus there is no harm in shopping around and comparing the benefits of different banks, just remember to keep track of all your accounts. Don’t allow them to go dormant and reach a negative balance as this might appear in your credit report.

Do you have only one bank account? Don’t miss out on better rates and terms, see what the others offering for savings and fixed deposit accounts. Let us know if you have anything to add to this article in the comments section down below!

Image credit: Rob Pongsajapan’s photostream

 

0 0 votes
Article Rating

SHARE

Comments (0)

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments
Top Banking Articles
Post Image
Best Fixed Deposit Accounts In Malaysia – October 2021
The RinggitPlus Team
- 1st October 2021
We provide monthly updates on the best fixed deposit rates in Malaysia with tables showing the top 5 rates for the duration of 1, 3, 6, 9, and 12 months.
Post Image
Best High Interest Savings Accounts In Malaysia (October 2021)
Pang Tun Yau
- 6th October 2021
Make your money work for you by depositing them into the best high-interest savings accounts in Malaysia!
Post Image
Malaysian Banks And Local Institutions Offer Financial Assistance For Customers Affected By Covid-19
Alex Cheong Pui Yin
- 1st April 2020
(Last update: 1 April 2020, 3.40pm to include FAQs by banks.) With Malaysia going into an extended period […]
Post Image
Free Digital Tools to Help Market Your SME Business
Ahmad Mudhakkir
- 2nd July 2018
If you want to make sure other people know about your business, here are the free digital tools that can help you do it!

Related articles

Related Posts Image
Related Posts Image
Related Posts Image
Related Posts Image