Saturday, January 30, 2016

Consolidating bank accounts

One more step in organizing my personal finances. I closed my UOB savings account and consolidated it with my UOB One Account to earn higher interest rates.

Why did i open up the savings account in the first place?

(1) I have the concept of 'paying myself first'. Instead of the formula. 'Income - Expenses = Savings', i try to adhere to the formula of 'Income - Savings = Expenses'. Having that separate account allowed me to transfer money from 1 bank account to the savings, so that i wouldn't touch it.

(2) I'm also quite compartmentalized. So if i designate 1 account for savings/investments, it feels much more neater to me from an accounting perspective. Dividends from investments goes into that account, and EPS to the various brokerage accounts i have are also directed into it.

Why did i have it closed now?

(1) I don't really need it now. All i actually needed was a way to keep and budget the money away, even if it's in a single bank account. As you may know, i use YNAB, and YNAB allowed me to budget my savings/investment money (as well as other expenses categories) so i wouldn't accidentally used it.

(2) The savings account i have generates next to nothing in terms of interest. By consolidating the money into a higher yielding bank account, the money is 'working' harder in generating extra returns.

It really is quite troublesome, changing bank accounts. Sending hard copy forms for the closure and linkage forms for, and changing bank account for the CDP direct crediting services.

I went through the process once for changing GIRO for my recurring bills, and thankfully, this process is much easier and less troublesome.

Happy to take one more baby steps to organizing my finances. Organised my credit card to get more rebates, and now bank accounts for higher interest.

More steps to come!

If you have any ideas, please do share with me :)

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