RBI Rule Update: In the modern era, almost everyone holds a bank account. People maintain accounts to save their money, and many even hold two or more accounts. Digitalisation has simplified the banking system, encouraging people to keep accounts with various banks.
With technological advancements, one can open an account from the comfort of home without the hassle of visiting a branch. Many people wonder if holding multiple accounts causes any issues. You can clear up any confusion regarding how many bank accounts an individual is permitted to open under RBI rules by reading below.
Although the government and the RBI allow you to open an unlimited number of accounts, having too many is not necessarily beneficial. According to financial experts, maintaining two to three bank accounts is considered ideal for the average person.
One of these could serve as your salary or primary business account, another for investments or household expenses, and the third for emergency funds or long-term savings. Beyond this number, the disadvantages often outweigh the benefits, and managing multiple accounts can become a headache for the average individual.
Disadvantages of having too many bank accounts:
The biggest drawback of holding multiple bank accounts is the requirement to maintain a minimum balance.’ Nowadays, almost all commercial and private banks mandate keeping a specific minimum amount in the account to keep it active. If you hold 5–6 accounts and fail to maintain the minimum balance in all of them, banks may impose heavy penalties. This leads to the unnecessary deduction of your hard-earned money.
Additionally, you have to pay annual maintenance charges for debit cards, SMS alert fees, and other hidden charges associated with each account, placing an extra burden on your finances. Another serious issue associated with holding multiple accounts is the risk of fraud or cybercrime, as well as the accounts becoming inactive.’ When we have numerous accounts, we are unable to regularly monitor the transactions across all of them. If no transaction takes place in an account for an extended period (typically two years or more), the bank declares it ‘dormant’ or inactive.
