How many bank accounts should I have?

There’s no magic number of accounts that is best for everyone. How many bank accounts to have—and what types of accounts—will depend on your personal financial needs and preferences. 

Read on to help decide how many bank accounts to have and which types might be right for you.

Key takeaways

  • Having multiple bank accounts may help you with budgeting, but it also might require a little more work to keep your finances organized.
  • A dedicated savings account for your emergency fund can help you track the account and separate it from your day-to-day spending account.
  • Setting up different bank accounts may allow you to tap into multiple opportunities, like earning more interest for your savings, and other perks.

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Common reasons for having multiple bank accounts

There are several potential reasons to have multiple bank accounts, depending on your needs, financial goals and lifestyle.

Budgeting and money management

Creating a budget often involves breaking down your money into categories of expenses and savings. Dedicating some of these categories—for things like bills, emergencies and vacations—to their own accounts can make it simpler to track them. And you could see how well you’re sticking to your budget—or where some areas may need to be adjusted. 

Automatically transferring a portion of each paycheck into each of the accounts, like with direct deposit, can also make funding the accounts convenient. 

Taking advantage of perks

Some accounts may offer certain advantages that could simplify your financial activities, make goals easier to accomplish or possibly earn more in interest. For instance: 

  • Opening a checking account could give you access to cash through a vast network of ATMs. 
  • Opening a savings account could help you build a nest egg while also earning interest. 

Having a separate account from a spouse

If you and your spouse have a joint bank account, you may find it useful to also have separate accounts. Separate accounts can allow each person more autonomy over their money and the ability to manage their personal funds in a way that makes sense for them.

Keeping business finances separate

Those with a side hustle may want to keep their personal finances separate from their business finances to protect their personal assets and credit. Setting up a separate business checking account could also help when it comes to bookkeeping and taxes.

Monitoring kids’ finances

Creating a separate kids savings or teen checking account for each child can help them learn about money management as you monitor how and where they spend and save money. You can also regulate how much goes into the account.

Can you have too many bank accounts?

How many and what types of bank accounts you have can vary depending on your financial needs. At a minimum, it might make sense to have both a checking and a savings account, but there’s no limit to the allowed number of bank accounts per person. 

If you’re managing multiple accounts, it’s worth thinking about a few things: 

  • Organization: Keeping multiple accounts straight could be challenging, especially if the accounts are at different financial institutions.
  • Fees: Some accounts and banking activities can have fees like an overdraft or a monthly maintenance fee. If you have multiple bank accounts that incur fees, they can add up.
  • Minimum balance requirements: Some bank accounts have a minimum balance requirement. If that’s the case and you don’t have enough money to keep accounts at their minimums, you could be charged a fee, receive no interest or have the account closed.

With all that in mind, it’s worth considering whether one bank might meet all your needs. Perhaps one with no monthly fees and no minimums?

Should I have multiple checking accounts?

Checking accounts can offer easy access to spending money, the option to use a check or debit card and the ability to draw money from an ATM or with cash-back options in participating stores. Plus, many checking accounts are insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA), which generally helps keep account deposits safe. 

Ultimately, whether or not it makes sense to have multiple checking accounts—to do things like separate fixed and variable expenses—is up to you.

Should I have multiple savings accounts?

Some people might find it easier to have one savings account for their emergency fund and another savings account for specific savings goals, like a car or a down payment on a home. And others may like another dedicated savings account for child care expenses.

Savings account for an emergency fund

An emergency fund is money set aside for unforeseen expenses so that you can be better prepared to pay for them. Having emergency funds in a separate savings account might help avoid the temptation to access the money except in the case of emergencies, such as:

  • A medical illness or injury
  • Losing a job or getting a pay cut
  • A car accident or major car repairs
  • Large, unexpected home repairs 

Savings account for a specific expense

You might consider setting up a dedicated savings account if you have a large expense or long-term goal to save up for. Some possible examples are:

Alternatives to standard checking and savings accounts

Some banks offer accounts beyond standard checking and savings accounts. These accounts might offer  better interest rates or other perks. But in exchange, the money may not be as accessible. Here are a few examples: 

  • High-yield savings accounts: Banks or credit unions generally offer high-yield savings accounts, which are insured by the FDIC or NCUA and could be a good option for longer-term savings accounts. These accounts tend to have a higher interest rate—or annual percentage yield (APY)—than typical savings accounts, so account holders can earn more interest as they save. 
  • Certificates of deposit (CDs): Banks or credit unions typically offer CDs, which often earn a higher rate of interest than traditional savings accounts—in exchange for keeping money in the account for a set amount of time. Depending on the financial institution and the account’s terms, early withdrawal of the funds could incur a penalty fee. 
  • Money market accounts (MMAs): These types of savings accounts might offer a higher interest rate but could require a higher account balance. MMAs may also limit how many account transactions are allowed each month.
  • Cash management accounts (CMAs): These accounts are generally offered by brokerage firms and robo-advisers for large amounts of money, often in partnership with FDIC-insured banks. They typically offer a higher interest rate, with access to the account through checks or a debit card.

Can having separate bank accounts help my credit score?

By themselves, multiple bank accounts generally won’t affect your credit score, but your account history could show up on your ChexSystems report.

As a budgeting and financial management tool, separate bank accounts may make it easier to handle your finances. And that could help factors that affect your credit, such as avoiding late credit card payments.

Ideal number of bank accounts in a nutshell

There is no universal number of bank accounts to have. But by figuring out your financial goals and needs, you might be able to use multiple bank accounts to streamline your saving and spending activities.

Want more information on how to manage your financial activities? Learn how to determine how many credit cards you should have.

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