Keeping your money in the same bank has its own benefits and drawbacks. So, if you are considering whether or not to keep all your money with one bank, you might want to begin by considering the advantages and disadvantages of doing so. By spreading your money in two or more banks, you are reducing on the risk, getting more services in different bank and having more ATMs to use, among other advantages.
Here are reasons why you should not keep your money with one bank
MORE GREAT SERVICES. While some accounts might have the same features across banks, each bank tries to offer something that the other one does not. You might have a bank that gives you the best checking account and a very low interest on your savings, while another one could be giving out higher interest on savings and a not-so-good checking account. This is when it would be to your advantage to have two banks, so you enjoy the good benefits from each one.
THE CONVENIENCE OF A BIGGER ATM AND BANKING CENTER NETWORK. With two or more banks, you have more banking centers and ATMs to access. This gives you more convenience and access when you have to withdraw or deposit funds. It saves you money as well. You don’t have to drive long distances to look for your particular bank or you don’t have to use another bank’s ATM where you will be charged usage fees.
REDUCED OR SPREAD RISK. The loss resulting out of bank fraud is minimized if you have more than one bank. Should your account be fraudulently accessed, you will not lose all your money if you have another account in a different bank. Even when the bank is trying to help you recover the money, you may not have access to your funds until the process is complete. Imagine how inconveniencing that can be if that’s all you had.
INSURANCE. Almost all major US banks’ deposit accounts are insured by the Federal Deposit Insurance Company (FDIC), but that is still up to a certain maximum (which means if your bank should go out of business, you will lose everything over the maximum insured limit). Currently, each depositor in an insured bank is covered up to $250,000 through Dec. 31, 2013, after which it will return to the standard amount of $100,000 per depositor for all account categories except IRAs and other certain retirement accounts, which will remain at $250,000 per depositor (according to fdic.org). So, if you have more than the maximum insured limit, you may not want to keep all of it in one bank.
The only major advantage of keeping your money in the same bank is the convenience of doing all your business in one place. If your funds are in one bank, you can basically do everything in one stop. This makes managing your money and business easier than if you have multiple banks. If you use online banking, it becomes even more convenient to take a look at all your accounts and manage them in just one browser opening. Transferring funds, paying bills and other online banking services are easier with one bank. Also, your bank statements can be combined, so you will stay more organized if you have one bank.
Since our financial preferences are different, it is wise to consider the weigh the benefits and drawbacks if you are not sure whether or not to keep all your money with one bank.