Do you keep your money all in one pot? Or perhaps you struggle to keep track of it, with multiple accounts and hiding spots lost from your memory. Whatever the case, there’s possibly never been a better time to get your finances in order.
The UK and other parts of the world are in the grips of a serious cost of living crisis, with inflation higher than it has been in decades. Some 86% of UK adults are now worried about day-to-day living costs. This makes it paramount for individuals to make sure their money is safe and working as hard for them as it reasonably can.
In most cases, that doesn’t mean opening a single current account and being done with it. Below, read up on the key reasons to keep your money in separate places.
Protection if the worst happens
As the old saying goes, you should never put all your eggs in one basket. It’s a phrase that’s used in many contexts. But when talking money, this means spreading yours out just in case something bad happens in one location.
Your main bank account could fall victim to fraud, for example, leaving you – at least temporarily – out of pocket. Having access to money elsewhere will keep you going in the meantime.
Plus, each bank account is only covered up to £85,000 by the Financial Services Compensation Scheme (FSCS). If you have more than that in one account and it gets targeted, you might not get it all back.
On a less serious note, sometimes banks experience technical difficulties that momentarily stop you sending or receiving money. Having other options could save the day.
Different purposes
Using different locations for different purposes can also be beneficial. For example, opening an easy access savings account alongside a current account could help you budget better.
You could move a certain amount of spare money to that savings account each month, reducing your ability or temptation to spend it unnecessarily. Similarly, you might keep the money you need for bills separate to the rest of your disposable income so that you always have the essentials covered.
Incentives and features
A third good reason to move your money around is the opportunity to take advantage of more perks and features. Different accounts come with different interest rates as well as offers for new customers, so you could make extra cash just by splitting your existing money up.
Similarly, you might be attracted to different account features. One bank could offer cashback opportunities, for example, while another might have a better mobile app or more generous overseas spending allowances. Creating multiple accounts and using them simultaneously allows you to get the best of everything.
Have you kept your money in one place for too long? With these benefits in mind, it could be time to cash out.