Do you have multiple bank accounts with multiple financial institutions? I do, and I’ll tell you why I think this is one of the best moves you can make with your money.
A few years ago a friend of mine got caught out by only having one bank account. The bank that he held his only account with had suffered from a major computer glitch and so he was unable to access his money.
To be fair, computer glitches with banks are fairly few and far between, but this computer glitch disrupted millions of people across Australia. The glitch happened on a Friday which meant that many people were unable to access their pay for the entire weekend. This caused wide spread problems for many Australians, but my friends main concern was how he was going to get groceries over the weekend. You see he was unable to withdraw cash from automatic teller machines, transfer money to other banks or even use credit cards issued by that bank. He was totally financially isolated, even his wife only had accounts with the same bank and so she too had the same problem.
In the end they ended up borrowing money from his wife’s parents so that they could buy petrol for the car and get food over the weekend.
International Bank Accounts
My brother recently came home to meet my son (his nephew) for the first time from the UK. He ended up having a stop over in Thailand for a few days before making his way back into Australia. What he didn’t expect was that his UK savings account got frozen due to suspected fraudulent activity. It seems that he forgot to mention to his bank that he was leaving the country and would be using his card overseas. This caused him major issues as that was the only account he had, and he was unable to contact the bank over the phone as his mobile was out of credit and he had no money to top it up.
Fortunately he had some friends with him and so he was able to sort out his situation, but he did have to fend for himself without any money for about a day. This wouldn’t have been a problem if he had opened one of the many fixed rate cash isas in the UK that are available these days.
Multiple Savings Accounts
I know that once my friend finally got access to his money again, he went straight out and signed up for a new savings account with a different bank. Fortunately he had plenty to choose from as there are heaps of great accounts out there if you take the time to look around.
I’m not sure if my brother has done the same thing as my friend or not, but there are so many choices for savings accounts in the UK that he would be silly not to look into it. One of the best things about being in the UK is that there is far more banking competition than there is in Australia. This means that there will be much better deals on offer like those found at BM Savings that there is really no excuse for him not to get a second account.
These days with so many people having access to the internet, it has never been easier to get online and check out some of the different savings accounts that are available. Many financial institutions even allow you to apply for a savings account online. So perhaps it might be time to organize that second account just in case of an emergency.
How I Diversify
I got a little paranoid after the GFC with all the doom and gloom that was going on in the news. So I decided to spread as much of my money around as possible as a diversification strategy to limit the risk to my savings. This meant that my wife and I now have at least 3 banks accounts and a credit card each through different financial institutions.
We just never want to get caught out not having access to our money like both my friend and my brother did and I feel the best way to do that is to look into having multiple bank accounts.
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