Have too many savings accounts? Here's the risk

How many savings accounts do you have? If you are a salaried person there is a good chance that you have six-seven savings accounts, most of which are lying idle.

After all, every time you hop a job, your company opens a new account for you, and even after changing the job, you don’t close the account.

“But, it could come back to haunt you. For instance, when you are filing income tax returns, the assessing officer may seek data of all your accounts or as the Cobrapost revelations show, it might even be misused to launder black money,” says a report published in Business Standard today.

Bankers say that many keep such unused accounts and this is because they are not aware of the consequences of keeping such unused accounts. The Reserve Bank of India stipulates that if an account is not used for a year, it becomes inactive. If it is not used for two years, it becomes dormant account. It makes sense to close such accounts since these can be easily misused and you are better of parking those funds in a higher interest paying instrument.

Closing the account is no big deal, all you have to do is give a written application. But if it’s a joint account or an account with no nomination, it could be a bit painful and need some legwork along with paper work.

As far as the ideal number of accounts go, the story quotes, Suresh Sadagopan of Ladder7 Financial Advisory Service, as saying, “Three to four bank accounts per family should be manageable. Anything above that should be kept only if its unavoidable and very important.”

Read the whole Business Standard story here.