Author: Financial Awakening Blog
If you still haven’t read Step 1 – Plan ahead. Imagine where you are when you retire, I highly recommend you to read it first.
Most of us will have a bank account. And most people do banking in only one bank. The reason is that it is easier to manage. However, is the ease of manage the only factor we should consider when it comes to financial planning?
There are some benefits to establish your financial self in more than one bank.
Diversify to minimize the risk
The money in our bank account is insured through government initiated insurance program for up to $100k. Let’s say if you have $200k, then it makes sense to put $100k in each bank account to make sure all your money is insured. Also, when one bank go bankruptcy, you still have liquid money in another bank that you can use. Although your money is insured, it takes time for you to get the money back.
Different bank subscript to different ATM network
Most bank only subscript to one ATM network, such as Plus or Cirrus System. If you are travelling an need some cash from the ATM machine, you might get caught up if you have only one bank card that subscript to one network while the ATM in front of you can use only the other network.
Separate your business self from yourself
Have you ever been audited by CRA or IRS? If not, you are lucky. However, when they do audit you, you will be glad that you have an account for only business and another account only for yourself. I personally have another account for my investments in stocks.
You bank will not have all your information
You don’t want to be transparent to your bank. If you bank have all your money and know everything about you, you open yourself to them. If they freeze your account for any reason, you will have no money to use. It is like when you are playing pokers, the last thing you want to happen is that the other players know everything about what you’ve got.
One bank may excel in one area while another bank is good at other area
Some bank may be good for mortgages, while other good for investment. Some bank have lots of transaction, while the other only have a few. You should get the best out of each bank.
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