Bank accounts have gotten easier to manage with online access, and you might wonder – can you have more than one bank account?
You can open multiple accounts without restriction. But while searching around for the best account options, you may find some banks advertise perks and affordable costs but may lack other benefits like rewards, investing options, and credit-building opportunities. Although having more than one bank account is possible, it might not always be necessary.
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Why would you need multiple accounts?
You might figure that keeping all your money in one account works, or you might find yourself with many bank accounts. Here are some reasons
Better budget management
Keeping your money in separate accounts is a great way to help you budget. If you’re saving up for a big expense like a house or a car, putting money aside in a savings account helps you mentally process that money as off-limits for regular use. Plus, you can set up an automatic transfer each month from your checking to your savings account to help you budget more effectively.
Separation of personal and business expenses
If you run a business, having separate personal and business accounts is critical. You can’t use a business account for personal expenses, and separating the accounts keeps you from accidentally making that mistake.
Increased security and flexibility
Keeping money at home exposes it to risk of loss from theft or disasters like fire or flood. Money in the bank is insured up to $250,000 per account type. You also gain the flexibility to move money around between accounts, make online payments, and keep track of your finances with alerts and online statements.
Optimization of interest rates and fees
Many bank accounts come with different costs, like a monthly service fee, wire transfer fees, and more. If you have money tied up in a bank with high fees, you may want to open a new account with a bank that doesn’t charge as much.
To maximize the interest rate paid on your account, you can also open a high yield savings account that pays more interest than the national average.
Different types of bank accounts to consider
Although the money is all yours, you may want to create specific accounts intended for specific purposes. Consider the different varieties of bank accounts that may interest you.
Checking accounts
Having separate checking accounts might help set aside money for different types of purchases, like everyday spending and your rent or house payments. Although your checking account may earn little to no interest, the money is available for use anytime.
Savings accounts
If you’re saving for different purposes, you may want to open separate accounts for each of your goals. Different savings accounts could be dedicated to purposes like emergency funds, travel expenses, or big purchases like a new car or home renovation. You can direct deposit funds from your paycheck to reach savings goals faster.
Investment accounts
Investment accounts allow you to take more risks with your money than a checking or savings account to help build wealth. Accounts may offer access to different investments, and you can also use accounts to achieve various goals.
What to consider before opening multiple bank accounts
You shouldn’t open bank accounts willy-nilly. First, take a step back and evaluate a few things.
Understand your financial goals and needs
Before you open a new bank account, consider why you’re doing so. Evaluate your finances, including what you’re spending your money on each month. Then, consider your financial goals. Having multiple accounts helps you to keep your immediate needs and your hopes for the future separate, so you don’t draw from one to aid the other.
Evaluate fees and charges associated with multiple accounts
Since different banks charge different fees for their usage and for certain transfers, you shouldn’t open an account with the first bank you find. Do some research first to see what banks are offering the best solutions for your specific financial goals.
Manage your account balance and minimum requirements
New accounts don’t come without a commitment. Another thing to keep in mind is that if you open multiple bank accounts, that comes with a plan to keep a certain amount of money within that account. Many banks have requirements for the minimum amount of money you can have in them without being penalized. Not all do, however. Research what accounts will work best for you before opening a new one.
Maintain proper record-keeping and monitoring
Having separate accounts is a method for budgeting effectively. If one account is specifically dedicated to bills, another to investments, and another to savings, you’ll have a more accurate view of how your finances are divided up.
Make sure that you have easy access to bank transactions and alerts so that you can monitor inflows and outflows. If tax authorities come knocking and need to see records, you’ll be ready.
Benefits of Owning Bank Accounts
Bank accounts offer different solutions and you may find yourself with more than one bank account. Find an institution with convenient account access, quality customer service, and low fees.
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FAQ
Do I need to pay additional fees for having multiple bank accounts?
Although banks don’t automatically charge you for opening a new account, some banks charge a fee for servicing an account. Those monthly maintenance fees can add up. Check before you sign up.
Can I link all my bank accounts together?
Yes, you can link bank accounts even among different financial institutions.
How can I keep track of my multiple bank accounts?
You can keep track of multiple bank accounts by checking your monthly statement online and setting up notifications for important changes.
