CIBIL Score Rules 2025: How many bank accounts do you require, and can they be more than one in number? Can having multiple bank accounts affect your CIBIL score? Let’s go in detail into it and, more importantly, learn the rules necessary to manage our finances wisely.
Understanding the Impact of Multiple Bank Accounts on Your CIBIL Score
With so many lenders eagerly waiting to receive your application, one positive aspect of your CIBIL score is all they need to turn your application into approval. While opening and maintaining multiple bank accounts might have no direct link with your credit score, the mismanagement of different accounts may well cause one poor effect. Here is how it happens.
Minimum Balance Maintenance
One of the most common problems faced with multiple bank accounts is the upkeep of a minimum balance in each of them. Most banks impose an average amount that you need to keep in your bank account to avoid penalty charges. Failure to comply with the conditions may attract charges for which you are left financially stressed.
Pro Tip: Rather than spreading your funds thin among several accounts, consider putting them all under one or two accounts. That way, you will be better able to manage the maintenance minimum and will not incur additional charges.
Extra charges
Maintaining multiple bank accounts entails added expenses. Most banks charge annual maintenance fees or service charges for every account. These things again add to the expenses and slowly eat away at the hard-earned savings.
Did You Know? While some banks charge just for opening an account, they add additional charges for services like debit cards, credit cards, and other banking facilities. You can imagine how these additional unseen charges can lead to massive losses if not kept under observation.
Bad Credit Score
Savings accounts don’t directly figure into your credit score calculation, but mismanagement might have indirect effects. An example of such indirect effects would be failing to keep up the minimum balance for a particular length of time or failing to keep an account active for an extended length of time.
Key Insight: A bank can flag an inactive or low-balance account, which ultimately reflects bad on your creditworthiness. Always close such accounts that are not being used.
Tax and Paperwork Hassles
For those with multiple bank accounts, tax filing could become cumbersome. All bank accounts must now be disclosed when filing ITR returns, according to the Income Tax department guidelines. Time-consuming, as well as stressful, may track down statement issues and transactions on multiple accounts.
Important Note: The IT department will monitor the accounts of taxpayers to ensure they report all of their bank accounts. You’ll be penalized if you don’t disclose all your accounts, so keep things neat and tidy this coming tax season.
Automatic Conversion of Salary Accounts
A salary account is converted into a normal savings account by the bank in case no salary is credited into it for three continuous months. Generally, this saving account comes along with certain new rules like that of minimum balance requirement.
Warning: If the minimum balance is not maintained in the converted savings account, the bank charges penalties, which are deducted from the same account by the bank automatically.
Final Thoughts: Ways to Keep Your CIBIL Score Intact
While it’s not bad to have a couple of bank accounts, it’s vital to handle them appropriately so that the CIBIL score is not adversely affected. Here are some useful tips:
- Consolidate Accounts: Retain only those accounts that are used actively and close those accounts that are inactive.
- Monitor Balances: Ensure that you maintain a minimum in each of the accounts so you won’t be charged penalties.
- Track Fees: Be aware of maintenance or service charges around your accounts.
- Stay Organized: Maintain a record of all your accounts and related statement details that can be referenced during taxation.
- Following these ideas can let you enjoy the merits of having multiple bank accounts but never at the cost of your financial health. A good CIBIL score is, after all, your ticket to better loan deals and financial opportunities.