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Single Bank Account: If you have more than one bank account, then it is very important for you to know that keeping more than one bank account can cause monetary loss, which people often do not pay attention to.
If the earning person is a salaried individual, it is better to have a single savings bank account than multiple savings accounts. Maintaining a bank account is easy and when you file your income tax return, your job becomes easier as most of your banking details are available in the same bank account.
But apart from convenience, if you have a savings bank account then there are some monetary benefits as well as you will be paying bank service charges on debit card AMC, SMS service charges, minimum balance etc.
As per RBI rule, it is better to have a single bank account as it becomes easier to maintain minimum balance and avoid paying bank service charges like debit card AMC, SMS. If a person is salaried, having a single savings account makes it easier for the earning person while filing income tax returns.
Possibility of forgery
Having more than one bank account is likely to mean an inoperative account, which is most prone to fraud. This happens when a salaried individual changes job from one company to another leaving the salary account. In such a case the salary account becomes inoperative and as stated earlier, such accounts are most prone to fraud.
Threat to CIBIL Score
Having more than one account can be a problem in managing your bank account with the proper minimum balance. In such a case, a default can lead to a penalty which is directly related to your CIBIL rating.
Multiplication of Service Fee
Having a bank account attracts various service charges like SMS alert service charges, debit card AMC, etc. If you have a single bank savings account, you will have to make a one-time payment while in case of multiple banks, the service charge for the savings account is doubled.
Hold on your investment
There is also a requirement of maintaining a minimum balance in order to have a bank savings account. If you have multiple banks then there is a possibility of getting a huge amount stuck in your savings bank account. These days, private banks are asking for a minimum balance of Rs 20,000 and if you have three such bank accounts in three different banks, your Rs 40,000 will get stuck in maintaining the minimum balance of two additional bank savings accounts and investing will not be able to do.
This additional Rs 40,000 can be used for investment purpose and a return of 8 per cent can be earned on the same as debt funds attract at least 8 per cent in short term investments. But, in a bank savings deposit one would get around 4-05 per cent, which is almost half of what one earns through investing in debt funds.
Income tax fraud
Interest up to Rs 10,000 in a bank savings account is tax exempt and hence TDS is deducted. So, unless you are getting interest of Rs 10,000 in your bank savings account, your bank will not deduct TDS, it may happen that your bank has not deducted TDS like in your single bank account.
10,000 is not the interest earned in a financial year, but after adding the entire interest in all your savings account, it may cross Rs.10,000, making you liable to deduct TDS. In such a situation, you will have to give this information to the Income Tax Department during ITR filing. Failure to do so would result in income tax fraud, which was done unknowingly.