When I opened an account at a bank, I was given two bank accounts: a savings account, and a chequing account. I was also given a debit card that is linked to the chequing account. The chequing account and the debit card have no monthly fees. The current interest rate is 0.05% for the savings account, and 0% for the chequing account. For the last 5 years, due to low interest rates, I have placed 100% of my cash in the chequing account and completely avoided the use of the savings account. Managing one account instead of two accounts saves time:
- Record-keeping is simplified. There is only one set of statements that records all my cash transactions.
- I do not have to make small transfers from the savings account to the chequing account whenever I need cash in the chequing account. All the cash is already in the chequing account.
I maintain up to $10k of liquid funds in the chequing account, of which $1,000 is for regular spending and $9,000 is for saving. I am currently losing out on $4.50 of interest per year ($9,000 * 0.05% = $4.50) by not using the savings account. I do not mind this small loss, given the conveniences listed above.
What are the disadvantages of this arrangement? Is it less safe than using two accounts?
Assume that I am highly disciplined in managing my spending, and in regularly checking my bank accounts for suspicious transactions.