Why Maintain Multiple Bank Accounts: A Strategic SEO Perspective
Do you maintain multiple bank accounts? Here are the reasons why, backed by a google SEOer's experience and insights.
Strategic Banking for Financial Security
Stay Ahead with Competitor Knowledge
Ensuring that your primary bank remains alert and responsive to your needs is crucial in today's dynamic financial environment. As someone with a decade of experience in the financial industry, I have always maintained a primary bank along with a “wanna be” bank. This strategy keeps my primary bank on its toes, preventing complacency and ensuring they do not take our relationship for granted.
Tactical Benefits During Business Changes
When there is a change in management, a bank gets acquired, or while negotiating for rates and terms, having a second relationship with a competitor bank proves invaluable. If your primary bank fails to meet your expectations, having an account with a second bank can ensure uninterrupted service and prevent service interruptions.
Practical Reasons for Multiple Accounts
Bank Guarantee Protection Limits: Bank guarantees typically provide protection up to a certain amount. Sticking to this limit with any one bank is advisable to avoid exceeding it. Diversification: Not keeping all your funds in a single bank protects you against unforeseen issues like bank closures due to technical failures, currency runs, and IT meltdowns.Why Not Use Banks?
For some, the idea of paying a bank to manage and possibly 'gamble' with one's money is unappealing. However, strategic use of banks can offer significant benefits.
Multiple Accounts for Flexibility
I have a total of 10 current accounts across 8 different UK banks and 2 in the US. This setup serves multiple strategic purposes:
Ensuring Financial Security: Experiencing technical issues with one bank, like the one I faced, taught me the importance of diversification. Having funds spread across different banks ensures financial security and access to funds at all times. Payment Network Reliability: It's also important to have both Visa and MasterCard cards in case one payment network experiences an outage, as happened with Visa a couple of years ago. Account Closure Risks: Banks have the liberty to close your account at any time for various reasons, including suspicion of money laundering. Having accounts with different banks ensures that your money remains accessible even if one account is closed.Strategic Points for Improved Credit Score
Holding multiple bank accounts can significantly benefit your credit score by increasing the average age of your accounts and by taking advantage of switch offers from various banks. Here's how:
When multiple banks offer bonuses for switching accounts, having one account limits your bonuses to one. But with 10 accounts, you can switch 4 at a time, pocketing bonuses from 4 different banks while maintaining the other 6 accounts to keep the average age of your accounts longer. A longer average account age shows stability to lenders, which is beneficial when applying for major loans like mortgages.Conclusion
Maintaining multiple bank accounts is not just about diversification; it's about ensuring financial security, preventing account closures, and even boosting your credit score. By staying informed and aware, you can navigate the complexities of the financial world more effectively.