Why More than One Current Account?

JohnSwift10

I am 76 years old and my wife is 75.

Our only income are our pensions.

At present I have 6 bank accounts financed by switching money around and 6 credit cards with minimal purchases each month to generate the required direct debits, along with my council tax and gas and electricity.

I had a Santander 123 lite account but the fee was more than the cashback so I changed that to an ordinary account and left 10p in it.

So I am trying to tidy my finances up.

If I transfer all my direct debits to our joint BoS Vantage account, into which our pensions are paid and make all our purchases on one credit card which will be paid in full each month by direct debit all I would then need to do would be once a month transfer the excess over £5,000 to my savings account and if I forget one month, so what?

And if I cannot access my account online for a few days, also so what?

All future purchases will be made with credit card, in fact I haven't handled cash for the past year.

So can you see any problems with just using one current account?

I will, of course, be leaving a minimal balance in the accounts I will no longer be using.

eskbanker

The main reasons cited for multiple current accounts with different banking groups are to protect against technical issues but also any disputes with the bank (resulting in account suspension, etc) or card theft/loss.

However, if you have one funded current account, plus a savings account with a different bank (preferably not constrained to withdrawing only to the main current account), and a credit card with a third, that should be more than adequate....

colsten

I am not much younger than you and have numerous current accounts, for various purposes. Some pay interest, some pay rewards, some are needed for acces to Regular Savers, some pay cashback etc etc. There’s obviously no hard and fast rule for how many accounts somrone should have but I would always recommend at least two current accounts at different banks, to protect against issues such as we have seen with Natwest or TSB in the past. In any event, it’s a totally  personal decision - some people wouldn’t want more than one, others can’t get enough. 

lr1277

In terms of cards, there is the argument of having a Mastercard and Visa card, incase one system is not working or the bank's IT system  running that card is down, then you can use another card for your purchase.

This applies equally to debit and credit cards. Say your Mastercard credit card isn't working then you could use your VISA debit card assuming you have sufficient funds in your current account. But make sure the credit card is from a different provider to your current account provider.

In terms of current accounts, there is an argument for having more than one account incase one bank's systems go down and you can still pay your bills etc.

However if for whatever reason you get a CIFAS market on one of your accounts, then all your current accounts will be closed or suspended, in which case there is no benefit to having more than one current account.

At least that is my understanding. Others may come along with more/different information.

kaMelo

lr1277 said:

In terms of cards, there is the argument of having a Mastercard and Visa card, incase one system is not working or the bank's IT system  running that card is down, then you can use another card for your purchase.

This applies equally to debit and credit cards. Say your Mastercard credit card isn't working then you could use your VISA debit card assuming you have sufficient funds in your current account. But make sure the credit card is from a different provider to your current account provider.

In terms of current accounts, there is an argument for having more than one account incase one bank's systems go down and you can still pay your bills etc.

However if for whatever reason you get a CIFAS market on one of your accounts, then all your current accounts will be closed or suspended, in which case there is no benefit to having more than one current account.

At least that is my understanding. Others may come along with more/different information.

CIFAS markers are not one size fits all, with some more serious than others. If you get hit with a category 6 then there is a good chance all will withdraw services but it's not guaranteed to happen and each financial institution will make their own decision based upon information they gain from external organisations like CIFAS and internal data they hold too.

Eco_Miser

Well you obviously know why more than one current account. Plenty of people just use one account with no problem. But two interest bearing current accounts earn more interest than one, and reduce the chance of you being unable to access money at the moment you need to.

If you are not going to use an account at all, I suggest that you empty it, and close it properly, instead of being like me and having accounts with trivial amounts in that keep generating correspondence. I've a Santander account  that I can't even switch away - I need to go into branch with identity documents before I can do anything with it.

eskbanker

Eco_Miser said:

But two interest bearing current accounts earn more interest than one

Not intrinsically, but applicable for those saving enough to reach at least one cap on interest-earning balances!

Perhaps that's unfair pedantry but the way you worded that put me in mind of a poster a couple of years ago who managed to convince him/herself that a 3% account plus a 2% one were equivalent to a 5% one....

https://forums.moneysavingexpert.com/discussion/comment/75685240#Comment_75685240

JohnSwift10

However if for whatever reason you get a CIFAS market on one of your accounts, then all your current accounts will be closed or suspended, in which case there is no benefit to having more than one current account

So no point in having more than one account if I ever manage to get a CIFAS marker on my account then.

All that happens with my bank accounts is that our pensions go in and our direct debits come out.

I haven't withdrawn cash or paid in cash for over a year, or even used cash, everything is bought with one of my many credit cards.

All I will lose if I stop using my other accounts is about £60 a year.

Well worth it if it means I do not have to remember getting 6 small credit card transactions every month.

Eco_Miser

eskbanker said:

Eco_Miser said:

But two interest bearing current accounts earn more interest than one

Not intrinsically, but applicable for those saving enough to reach at least one cap on interest-earning balances!

As the OP is. but seeing the quote on its own, it could have been better phrased.

eskbanker said:

Perhaps that's unfair pedantry but the way you worded that put me in mind of a poster a couple of years ago who managed to convince him/herself that a 3% account plus a 2% one were equivalent to a 5% one....

https://forums.moneysavingexpert.com/discussion/comment/75685240#Comment_75685240

If only ...

colsten

JohnSwift10 said:

All I will lose if I stop using my other accounts is about £60 a year.

Well worth it if it means I do not have to remember getting 6 small credit card transactions every month.

As I said earlier, it's a totally personal decision. One size doesn't fit all. Do what's right for you. You don't have to justify or explain your decision.

There are other people who don't need to make a single credit card transaction, and who would lose £60 several times over if they reduced their current accounts to 1. They also don't have to justify or explain their decisions.

lr1277

JohnSwift10 said:

However if for whatever reason you get a CIFAS market on one of your accounts, then all your current accounts will be closed or suspended, in which case there is no benefit to having more than one current account

So no point in having more than one account if I ever manage to get a CIFAS marker on my account then.

All that happens with my bank accounts is that our pensions go in and our direct debits come out.

I haven't withdrawn cash or paid in cash for over a year, or even used cash, everything is bought with one of my many credit cards.

All I will lose if I stop using my other accounts is about £60 a year.

Well worth it if it means I do not have to remember getting 6 small credit card transactions every month.

The part you quoted was my analysis, which according to the later post by kaMelo, was incorrect.

However the number of accounts you have is a personal decision as stated by Colsten.

As I didn't want to take your thread off at a tangent, I asked the question about CIFAS markers and closure of account here:

https://forums.moneysavingexpert.com/discussion/6262144/does-a-cifas-market-close-all-your-current-accounts#latest 

As you can see account closure is not a given.