Your financial goals and needs are unique to you. That includes how many bank accounts you may need. Many people have a checking account. Some even have a savings account as a second account.
Should you have more than one bank account? You may wonder, “how many bank accounts should I have?”
Here are some reasons why multiple accounts may be a good idea and also why multiple bank accounts may not be for you.
One reason consumers may want multiple bank accounts is to stay organized. You could have a checking account for everyday needs. You could also have a savings account for rainy day savings.
However, you may want an additional account used for a specific reason. SoFi says, “Having a family savings account can also be fun, putting away money for future travel or saving up for a wedding or baby.”
Currently, FDIC Insurance covers $250,000 per bank per customer. If you have more than a quarter of a million in one bank account, you will want enough bank accounts to cover all of your deposits. That way, should any bank fail, you are protected.
3) Interest Rates
If you are on a set budget and know you have money left over at the end of the month, you may want another bank account with a higher interest rate.
That way, you can regularly transfer money to the higher interest-yielding account and let your money grow faster.
4) Cash Deposits
Some of the higher interest accounts are internet banks. Therefore, you are not able to make cash deposits.
This is why you will want a traditional bank account. Then, you can deposit cash into that account, then transfer it to the higher interest-yielding account.
5) Signing Bonuses
Banks want to lure you into becoming their customer. Moreover, they will do so with a cash incentive. This is often a reason why consumers will add another bank account.
6) Small Business Or Side Hustle
Opening a business bank account for a small business or side hustle will be helpful when you do your taxes. This will keep your business finances organized.
7) Large Transactions
SoFi recommends that you open a separate account for large transactions, such as a mortgage. “While couples do not necessarily need to share all of their finances, there are certain benefits to having a joint account for your household and family. For one thing, it can help cover large monthly payments such as a mortgage, rent, or other household expenses equally.”
While there are certainly a lot of benefits to having multiple bank accounts, one disadvantage can be monthly fees. Those fees could be waived if there is a minimum amount of money met.
The organization is the key to having multi-bank accounts. Whether you are using an app or a paper ledger, being organized will help consumers reach their maximum potential in managing money and saving for their dreams.
There are a lot of good reasons to have multiple bank accounts. The key is to know what you are saving for and stay organized along the way. This can be a tool to achieve financial goals and upgrade your lifestyle.