Advantages of multiple accounts (other than interest)?

lavenderlover

Hello,

As I have written about (in detail...) in another post, I'm thinking of complicating my set up from Student Account + Savings account to Student Account + Savings Account + Nationwide Flexdirect + YBS Regular Saver to maximise interest.

My question is, are there other benefits to doing this other than the interest itself? The interest isn't going to be huge with my modest funds, and it's a lot of hassle. Are there other things I should consider? Would it improve or worsen my chances of getting other financial products in the future? Will it have an impact on my credit score rating? Should I go ahead with it just to develop my skills in managing money?

Thank you!

Reaper

Anything that has a debt facility attached such as a bank account will affect your credit rating.

Having 1 or 2 and managing them effectively can raise your score as demonstrates you are good at managing your money. Having lots can lower it as they get concerned you are gathering too much ability to run up big debts and may be tempted to make use of it.

Savings accounts do not affect your credit score either way as they are not recorded. Though if you have large savings with a particular bank that is likely to improve your chances of getting a loan in future with that bank only.

As to whether it is worth it - consider how much time and effort is required to set it up and keep it going then put a price on your time. If it takes 2 hours work per month and saves you £5 then you have to decide if £2.50 an hour is worth it or whether you could do something more productive with your time.

lavenderlover

Thank you Reaper.
I think I will go ahead and try to open the accounts then. If my applications are approved, the time commitment really is minimal (three transfers a month which I can do online - total of 5 minutes?), so it's definitely "worth it" in terms of time. I've done a projection of the movement of my money until April 2015 and unless some big money-catastrophe hits me I should be able to always have the funds to get the maximum out of this set up, so it can only do my score good (or do nothing). Thank you for taking the time to reply

Eco_Miser

Further advantages of having accounts with multiple institutions are if the computers crash at one institution, you can still get money from another; and if a bank fails, you can still get money from another while waiting for your FSCS compensation.