Should I have several savings bank accounts?
The era of multiple bank accounts as a way to hide from the taxman is long gone and therefore it makes no sense to have so many. In the electronic age, Priya’s PAN is an adequate marker to link her accounts between banks, should the IRS decide to investigate. In any case, credit bureaus already link its loans between banks using the PAN. Therefore, except for two or at most three accounts, Priya would have to close the others.
Banks will mark an account as dormant or inactive if there is no activity on the account for a period of time. If the only transaction in an account is the periodic crediting of interest to the existing balance, those accounts will be treated as inactive. Priya may need to turn them back on if she needs access to the money. Therefore, it may only benefit its banks by allowing accounts and balances to reside there.
An easier solution for Priya would be to have a bank account that will be her main operating account, to which she can transfer money from her salary account. She can link all her payments and investments to this main account. She will only have to set up an electronic transfer to her main account, each time she gets a new job. She can then easily close the old bank accounts. It will make his life much easier.
(Content on this page is courtesy of the Center for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)