Based on the services offered by your bank, you may find that you can maintain all your financial accounts with the same lender. While maintaining different accounts in one bank certainly makes it easier to manage your money and receive personalized services, there are certain risks associated with this that you need to take into consideration.
Pros of Maintaining All Your Account with One Lender
Access to better interest rates and lower fees: Usually, if you maintain all your accounts in the same bank, you can negotiate for better savings interest rates. Further, the overall fee you may have to pay is also likely to be lower. For example, banks may waive off the minimum balance requirement for those who maintain a checking account and savings account in the same bank.
Personalized services: Maintaining several accounts in the same bank for a long time helps the lender get a better understanding of your financial situation and spending habits, which can help them offer more personalized services or products to you.
Coverage for eligible accounts: Given that the FDIC offers coverage of up to $250,000 for each eligible account, you don’t have to worry about keeping all your money in different accounts with the same insured lender.
Cons of Maintaining Your Accounts in One Bank
Missing better offers: You’ll find that several credit unions and online-only banks offer great interest rates on checking accounts and savings accounts, compared to traditional lenders. When you keep all your accounts in the same bank, you are essentially passing up on such offers.
Higher losses in case of identity theft: If your various accounts are interconnected, there is a risk of greater losses in the event of identity theft since getting access to one account may, in fact, make it easy for the fraudster to access the rest of your accounts and funds as well.
Losing out coverage if you high-balance accounts: If you have high-balance accounts in which you have over $250,000, you will lose out on the FDIC coverage.
If you are looking to open another account with your lender, it’s best to meet a representative from your bank and go over the options and benefits you may be eligible for. Based on this, you can decide whether you want to stick with the same lender or open an account elsewhere.
