When people change jobs or employers, a new salary account is often opened, leading to multiple bank accounts without intending to.
While having one or two accounts is manageable, having more than that can cause several issues.
If you’re not using certain accounts, it’s better to close them to avoid unnecessary expenses and complications.
1. Penalty for Not Maintaining Minimum Balance
Even if your salary account has zero balance, it can be converted into a regular savings account if no salary is credited for three months.
Savings accounts usually require you to maintain a minimum balance (from ₹500 to ₹10,000). If you fail to maintain this balance, the bank may charge penalties.
2. Additional Fees
Banks often charge fees for debit cards, SMS notifications, and other services.
Debit card fees can range from ₹100 to ₹500 or more annually, while SMS charges can be billed quarterly or yearly. These small fees can add up if you have multiple accounts.
3. Dormant Account Risk
If there’s no activity in an account for over a year, it can become inactive.
If no transactions are made for two years, the account is considered dormant, and you won’t be able to withdraw or deposit money until it is reactivated.
4. Blocked Funds
Banks often require a minimum balance of ₹10,000 in an account. If you have multiple accounts, that’s money that is just sitting there, unused.
For example, maintaining ₹10,000 in four accounts means ₹40,000 is tied up. It’s better to close any unused accounts and invest that money to earn interest.
5. Trouble Remembering Passwords
With multiple accounts, remembering different passwords for net banking, mobile apps, and ATMs becomes difficult.
Using the same password for all accounts isn’t advisable as it increases the risk of fraud.
6. Tax Filing Complications
When you have multiple bank accounts, filing taxes can become tricky.
You’ll need to provide details of all your accounts, which means tracking records from different banks. This can make tax filing more complicated and time-consuming.
If you’re not actively using some of your bank accounts, it’s worth considering closing them. This can help you avoid unnecessary charges and keep your finances simpler.
