Bank Accounts Limit – In today’s digital age, having multiple bank accounts has become increasingly common. Whether for salary, savings, investments, or business needs, individuals often prefer to open multiple accounts in different banks. But is there a legal limit? What does the Reserve Bank of India (RBI) say about this? Here’s a complete and updated guide to how many bank accounts one person can open in India, along with all the official rules, exceptions, and practical tips.
Understanding the Basics: Can You Open Multiple Bank Accounts?
There is no restriction by the Reserve Bank of India (RBI) on the number of bank accounts an individual can open. However, certain rules and guidelines must be followed, especially when it comes to KYC norms, account types, and taxation implications.
RBI Guidelines on Multiple Savings Accounts:
- RBI does not restrict the number of savings accounts a person can open.
- However, most banks discourage having multiple savings accounts in the same bank.
- Each account must comply with KYC (Know Your Customer) norms.
- Dormant or inoperative accounts may attract charges.
Common Scenarios for Multiple Savings Accounts:
- One for salary credit
- One for investments (SIP, mutual funds)
- One for family/household management
- One for online shopping
Sample Usage of Multiple Savings Accounts
| Purpose of Account | Bank Name | Type of Account | Linked Services | Status | Monthly Avg Balance | Charges If Inactive |
|---|---|---|---|---|---|---|
| Salary Credit | HDFC Bank | Savings | Salary, Bill Payment | Active | ₹10,000 | Yes |
| Investment Linked | Axis Bank | Savings | SIP, Demat | Active | ₹5,000 | Yes |
| Household/Family Use | SBI | Savings | Joint, Bill Split | Active | ₹0 (Basic A/c) | No (BSBDA) |
| Emergency Fund | ICICI Bank | Savings | ATM Only | Less Used | ₹2,000 | Yes |
| Online Shopping | Kotak Mahindra | Savings | E-commerce linked | Active | ₹3,000 | Yes |
| Child’s Education Account | IDFC First Bank | Minor Savings | School Fees, UPI | Active | ₹0 (Minor A/c) | No |
| Loan Linked Account | Bank of Baroda | Linked Account | EMI Auto Debit | Active | As per loan | Yes |
What About Current Accounts?
Current accounts are meant for business transactions and come with unlimited withdrawal features. RBI also does not limit the number of current accounts one can hold.
Key Rules for Current Accounts:
- You can open current accounts with multiple banks.
- However, as per revised RBI guidelines (August 2020), businesses should maintain their main current account only with the bank where they have the highest credit exposure.
- KYC compliance is mandatory.
- Maintaining minimum balance is essential (varies by bank).
When It’s Necessary to Open Multiple Accounts
Many people prefer multiple bank accounts due to various legitimate and strategic reasons:
- Segregation of personal and business expenses
- Taking advantage of different bank offers (cashbacks, interest rates)
- Managing loan repayments separately
- Ensuring privacy for different financial activities
- Salary accounts from multiple employers
Advantages and Disadvantages of Having Multiple Bank Accounts
| Factor | Advantages | Disadvantages |
|---|---|---|
| Expense Segregation | Better financial planning | Harder to manage multiple accounts |
| Offers and Benefits | Access to more deals and loyalty programs | Risk of dormant accounts and penalties |
| Loan Management | Simplified EMI tracking | Multiple statements to track |
| Emergency Backup | Backup if one bank has tech issues | Security risk if passwords aren’t managed |
| Investment Planning | Dedicated account for SIPs and recurring deposits | Confusing tax returns |
| Credit Profile Building | Can build multiple relationships with banks | May affect credit assessment if misused |
RBI KYC and PAN Requirements: Important to Know
Every new bank account must comply with KYC norms laid out by RBI. Banks will require:
- Aadhaar card (for identity and address)
- PAN card (especially to avoid TDS on interest income above ₹10,000/year)
- Passport-size photo
- Signature proof
If a person holds multiple accounts without PAN and interest exceeds the threshold, TDS (Tax Deducted at Source) will be automatically deducted.
Rules on Joint and Minor Accounts
Apart from individual accounts, one can also open:
- Joint accounts with family members
- Minor accounts for children below 18 years
These are counted separately from your personal savings accounts and follow slightly different guidelines.
Joint Account Features:
- Operated jointly or by either party
- Useful for shared expenses
- Nomination facility available
Minor Account Features:
- Guardian operated
- Can be converted to regular account after 18 years
- No cheque book until minor turns major
Exceptions and Special Cases: When RBI Restrictions Apply
While there’s no limit on how many accounts you can hold, there are a few exceptions or conditions to keep in mind:
- Basic Savings Bank Deposit Accounts (BSBDA): You can hold only one such account across banks.
- Jan Dhan Yojana Account: One per individual only.
- NRI Accounts: Rules differ for NRE/NRO/FCNR accounts; check RBI’s specific guidelines for NRIs.
- Dormant Accounts: If inactive for 2+ years, these are flagged and may require reactivation with KYC.
Account Restrictions as Per Account Type
| Account Type | Maximum Allowed | RBI Limitation Applied | Special Notes |
|---|---|---|---|
| Regular Savings | No Limit | No | As long as KYC is completed |
| Current Account | No Limit | Yes (for businesses) | One with highest credit exposure |
| BSBDA | One | Yes | Only one across all banks |
| Jan Dhan | One | Yes | Financial inclusion account |
| NRI Accounts (NRE/NRO) | No Limit | Yes | Based on residential status |
| Joint Accounts | No Limit | No | Counted separately |
| Minor Accounts | No Limit | No | Guardian required for operations |
While the RBI allows individuals to open multiple bank accounts, it’s important to manage them wisely. Keep track of minimum balances, interest earnings, account activity, and associated charges. Avoid holding too many idle accounts to prevent unnecessary fees and compliance hassles. Having multiple accounts is legal, useful, and even recommended in certain cases — as long as it is done responsibly and in line with RBI rules.
Frequently Asked Questions (FAQs)
1. How many savings accounts can one person legally open in India?
There is no legal limit. You can open multiple savings accounts across different banks, provided you comply with KYC norms.
2. Will holding many accounts affect my credit score?
Not directly. But excessive accounts and poor balance management may raise red flags during financial assessments.
3. Can I open more than one salary account?
Yes, especially if employed by multiple organizations. However, salary accounts may convert to regular savings if salary credit stops.
4. Is there a penalty for not using a bank account for long?
Yes. Most banks mark accounts as dormant after 24 months of inactivity and may levy maintenance charges.
5. Can I open accounts in both private and public sector banks?
Absolutely. You are free to open accounts with any scheduled bank, whether public or private, as per your need.