Want to get a little richer in 2016? Here is a handy tip that may help

Here's a tip to get a little richer in 2016

Bindisha Sarang December 12, 2015 09:21:54 IST

Would you like to be a little richer in 2016? Well you could just fix one money habit now – close all your unused banking accounts.

If you've been working for a while now in all probability you must have opened a new account every time you changed jobs, leaving a trail of unused accounts behind with some money lying idle in them. For some it could be a few hundred rupees enough to buy you a Udupi lunch for a family but there can also be even lakhs enough to buy you a brand new car.

If you think you aren't losing money as it earns interest of four percent per annum in the unused savings bank account, think again. You are paying an opportunity cost, you could end up earning much more if you close all unused accounts, collect all the funds and park the funds in a savings account which gives a higher rate. Some banks currently offer 6.5 percent, a few even seven percent rate on savings account. In fact, you could even invest these funds in fixed deposits or a PPF account to earn better returns.

Another reason to close these accounts is to prevent them from becoming inoperative or dormant accounts. Such accounts can easily be targets for potential frauds, like embezzlement. Also, such accounts can be used for money laundering, funding terrorism and illegal transitions. So it's best to close them.

If you don't want to close, such accounts reactivate them by making an ATM transaction. But, the best is to close them now and by the time it is the New Year, you might just end up a little bit richer.

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