Managing finances mainly depend on how you handle your savings and build your wealth. Whether it is saving for a home down payment, building an emergency fund, or setting money aside for an upcoming vacation, keeping track of your financial goals can become complicated if not done right.
Most people think of savings accounts solely as a source of emergency spending for a rainy day. However, they are also best used for allocating money for big purchases such as a home or new car. The ease of opening online bank accounts allows you to open multiple savings accounts within minutes, either with the same financial institution or spread out among several. To save money for multiple financial goals, you’ll need multiple savings accounts.
Setting up multiple savings accounts is the best way to reach your financial goals. This way, you can separate your money accordingly and track your progress on each goal. Here are some of the major reasons for having multiple savings accounts:
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Multiple money goals: At any given time, you might be having more than one financial goal. You could be saving for a down payment on a house, saving for an annual family vacation, saving for your next car, saving for a general emergency fund, and so on. If you put your savings into just one account, it’ll be hard for you to see when you are meeting your goals. By having multiple savings accounts, you can designate a certain amount that you need to reach for each savings goal.
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Automate monthly transfers to your accounts: The tools of modern banking, namely direct deposit and automatic transfers make it easy to put in motion a multiple account savings strategy. Each time you receive a paycheck, allocate a percentage of it to each of your savings accounts. Employers that offer direct deposit often allow you to have your paycheck deposited across multiple accounts according to amounts of your choosing. Else, you can also deposit your paycheck into one checking account and then funnel it to your various savings accounts by the means of automatic monthly transfers.
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Save money faster: The best way to actually save money without touching it is to direct deposit your savings directly into your savings account. If you wait until the end of the money to see what you have left over, you’ll find that you are never going to reach your savings goals. You have to direct deposit money from your paycheck directly into your saving accounts. The multiple saving accounts often include car down payment fund, emergency fund, vacation fund, baby fund, Christmas present fund, car insurance fund, etc.
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Interest rate benefit: As per income tax rule, tax is deducted at source by the bank if the interest income accumulates above certain amount per account. It is better to avoid putting all your money in the same bank. Depositing money in different banks will help in non deduction of TDS.
For further information, you can call on Santander Contact Number and get in touch with its team.