Can you have multiple savings accounts?

If you’re like many working Americans, you may want to start saving money for retirement, travel or other goals. But when it comes to how to get it done, you feel stuck.

The standard advice is to open a savings account and put a certain percentage of money there on paydays or on a certain day of the month. Opening one savings account is a smart first step. But you can go even further to make the most of your savings strategy.

You might be asking, “Can you have multiple savings accounts?” The answer is yes. Here, experts break down why opening multiple savings accounts may be the secret to reaching your savings goals. With their guidance, you’ll be able to answer: How can multiple savings accounts help you save more?

Most people save for many different goals at once. It takes extra work to track progress toward each of your financial goals if all of your savings are in one place.

With one savings account, you may wonder whether the money in it will help you afford a new car, your next vacation or both. When you have separate savings accounts for each of your financial goals, you always know exactly where you stand.

Here’s how opening multiple savings accounts can make saving money simpler:

Before you can make any savings progress, you need to identify your goals. Opening a savings account for each goal empowers you to save for what you really want in life. That could be a new home, international travel or a college education fund for your children. For example, you can open a 360 Performance Savings account today to grow your savings with a competitive rate.

One big reason multiple savings accounts work so well is they help you stay motivated to reach each of your savings goals, says Taylor Schulte, CFP®, a financial blogger and podcaster. Seeing $2,000 in your emergency fund, $1,000 for a new car and $500 for a vacation can be a lot more motivating than just seeing a savings balance of $3,500. Watching each account grow every month can help you stay excited about saving.

We’ve answered the question, “Can you have multiple savings accounts?” But what about how many you should have?

The number of accounts that’s right for you depends on the number of savings goals you have. If you’re new to saving money, start small so you’re not overwhelmed.

When deciding which of your financial goals deserve their own savings account, put an emergency fund at the top of your list, Schulte says.

“Start with one goal—like an emergency savings account—and save the minimum amount needed,” Schulte says. Schulte and other experts suggest keeping at least 3 to 6 months of living expenses in your emergency fund. 

This way, you’ll have money in the bank if you lose your job, take a salary cut or face unexpected medical bills. And by keeping your emergency fund separate from your other savings accounts, you’ll be less tempted to borrow from it, Schulte says. Keep in mind, one way to grow your emergency fund is opening a savings account with a great rate, like Capital One's 360 Performance Savings account.

“Then, move on to the next,” Schulte says. “Trying to save for too many things simultaneously could prevent you from making any of them a reality.”

Affordable living author Lauren Greutman agrees that you should prioritize your emergency fund first. Once it’s in a good place, she recommends opening multiple savings accounts for your top five financial goals.

“I have savings accounts set up for an emergency fund, vacation fund, car fund and Christmas fund,” she says. “Each of these accounts has an end goal. When I contribute to each account, I like to see how far away I am from that savings goal.”

Before you open multiple savings accounts, make sure you have a strategy. Follow these steps to keep on top of your multiple savings accounts and manage your savings goals like a pro:

As the experts noted above, you’ll want to start with your emergency fund. Schulte recommends making sure that your retirement fund is also on track before opening multiple bank accounts for shorter-term goals.

Once those critical savings goals are on track, write down your other savings goals, such as buying a new car, funding your child’s college tuition or making home repairs. Focus your list on your top five priorities and move on to the next step. 

Can you have multiple savings accounts with different goals for each? Yes. According to Greutman, online savings accounts are the best savings accounts for multiple goals. “Online savings accounts are a great way to continue saving money without the hassle of driving to a physical bank,” Greutman says.

Modern banking features like direct deposit and automatic transfers make saving across multiple bank accounts easy. How do these features work? Each time you receive a paycheck, put a percentage of it to each of your savings accounts. For example, every month you could automatically transfer 2% of your paycheck to your home repair account, 3% to your vehicle account and 5% to your child’s education fund.

Many employers that offer direct deposit also allow you to have your paycheck deposited across multiple bank accounts. If that’s not an option for you, then you can deposit your paycheck into one checking account. From there, you can move it to your multiple bank accounts through automatic monthly transfers. Capital One’s Paycheck Percentage tool offers a simple, hands-off approach to building your savings every time you get paid.

The question “Can you have multiple savings accounts?” is just the beginning. How much you save matters—and so does where you save. “Having more than one savings account is a good idea because it creates a specific plan for your money,” Schulte says. 

• Multiple savings accounts help you separate financial goals, making it easier to track your progress and stay organized. 

• Setting up dedicated accounts can keep you motivated by making goals, like saving for a vacation or a new car, feel more achievable.

• Automating transfers into each account helps you stay on track and steadily build savings without requiring too much work.

If you’re trying to meet multiple savings goals, opening bank accounts with higher interest rates may be the right plan for you. With this expert strategy, you’ll be more focused and motivated as you progress along your savings journey.

Ready to start? Capital One makes opening a 360 Performance Savings account easy to do in about 5 minutes, so you can get back to what matters.