Why you can and should have more than one current account
Tips / 16.07.2020
Gone are the days of stashing your hard-earned cash under a mattress.
Over the last few decades, millions if not billions of people have opened accounts at banks and financial institutions.
This has increased the convenience of handling cash, and has also helped reduce and prevent financial crimes.
While in the past, some people would select a bank and stick with it throughout their lifetime, today, people can open multiple accounts at different financial institutions. Why?
There are several benefits of opening and having multiple current accounts.
Find out what some of them are below.
1. Save more with better rates
Although in the past, savings accounts offered attractive interest rates, these days, current accounts have joined this bandwagon and are offering between 1.5% and 5% on your money kept in them across some banking institutions in the UK.
This can lead to good savings at higher interest rates.
On the other hand, e-money financial institutions such as N26, Revolut, iCard and myPOS offer free online accounts – both for individuals and businesses.
These types of accounts don’t offer interest rates, but they certainly come with a lot of added services and most importantly – without monthly or yearly fees.
It means that if you have multiple current accounts, you can enjoy more savings.
2. Improve your budgeting
Daily spending on small items builds up into large amounts of money being used up over the long term.
If you’re not great at budgeting and you don’t want to keep track of your funds with a pen and notepad, or an Excel spreadsheet, there are some tracking and monitoring tools to help you do this.
Depending on the current account you have and which financial institution or bank you hold this with, you can better manage your cash with the reporting tools available to you.
Some of these could include:
- Set weekly or monthly limits
- Lock/unlock debit or credit cards associated with the accounts
- Get digital cards issued to pay for subscription services like Netflix, Spotify, etc. Once you no longer want to pay for the subscription, you can always disable the card.
3. Switch incentives
Many banks and financial institutions are offering incentives to switch to opening new current accounts with them, and often, these incentives are rather attractive.
From greater rates to cash incentives for switching accounts, this is another great reason to open a new current account.
If your old account is free, though, you might want to keep it until you explore other options and decide which one works for you best.
4. Safety first
Unfortunately, debit or credit cards can get lost or stolen.
But if you find yourself in this situation and you have two or more current accounts, the chances are that you won’t have the added headache of waiting for your new card to arrive from the bank after reporting it as lost or stolen.
5. Benefits for house/flat shares and couples
Monthly bills are an inevitable part of our lives.
If you’re in a house/flat share or live with your significant other and you don’t want finances to spoil a good thing, it’s better to open a separate current account to which all parties can contribute on a monthly basis, and which can be debited for monthly bills each month.
This takes the hassle of collecting funds for bills on a monthly basis, and avoids uncomfortable conversations.
And depending on your financial services provider, you can also enjoy some cash-back rewards for debit orders on your utility bills, too.
6. Going on holiday
Switching between different current accounts while abroad means you can take advantage of cheaper rates.
These rates can vary from ATM withdrawals, contactless payments, Chip & PIN transactions or some other forms of making payments at international destinations where currency conversion needs to take place.
Check your financial institution’s tariffs before embarking on your journey, and select the current account that will offer you the best rates.
Having two or more current accounts certainly offers significant benefits, irrespective of the situation you currently find yourself in.
From tracking and monitoring your daily expenses, to increased safety in spreading out your cash across different accounts, it is certainly a good idea to consider opening more than one current account for yourself.