WHY YOU SHOULD'NT HAVE TOO MANY BANK ACCOUNTS

Individual must have a max of 2 saving accounts.
One with nationalised bank and
Second with a pvt sector bank.
Alternatively, one can be linked to savings and other with investments.

Why not more?

1. Inconvinient- problem of having many account numbers, pins, debit cards and documents. Adding all petty interest in these accounts for tax purpose also adds to your woes. If u forget to tax them and then if found by IT officers then you are in a fix.

2. Not safe. - Cases have come where frauds have happened involving embezzlement of money in accounts which are dormant.

3. Unused accounts become dormant. There are a number of restriction on the use of such accounts. And significant charges apply too.

4. Opportunity cost - Money lying idle in unused accounts which fetch interest of only around 3.5%.

Its always better to close excess accounts. Or you can convert them into saving cum fixed deposit accounts wherein excess money over a specific limit gets transferred to FD.

Note:

Dormant accounts with negative balance dont get reflected in your credit report as told by Credit Information Bureau.

Note:

Around 10 million bank accounts idle and 1360 crore rupees unused in them. (As given by RBI on 31 dec 2009)

Note:

Normally account with no transactions upto 1 yr makes it inactive and beyond 2 yrs dormant.

SOURCE: MINT 5 JAN 2011