How Many Bank Accounts Should I Have?

As you get older and become more focused on your finances, there are probably lots of questions on your mind.  How do I prepare for retirement? Why do I need to file taxes?  How many bank accounts should I have?  And while our goal at EveryDimeMatters is to answer all those questions, today we’ll focus on the last one…. How many bank accounts should I have?

Whether you’re newly married, new to the workforce, or just proactive with your money, all experts agree.  The short answer to the question “how many bank accounts should I have” is two.  At the very least, it’s recommended that every American have one checking account and one savings account.

Are there exceptions to this rule?  Of course.  Is it ok to have more than two bank accounts?  Of course!  Therefore today we plan to cover all those exceptions when it makes sense to have more than two bank accounts… And more importantly, why it’s crucial for you (and your partner) to have at least two bank accounts.

5 Reasons Why You Should Open At Least 2 Bank Accounts

1. It keeps your money organized

Think of each bank account you have like an organizational file.  If you put all of your money into one account or one folder… It would become pretty difficult to figure out what money is dedicated to what, right? 

Money that you might have meant to save could end up getting spent, and vise versa.  To avoid this from happening, open at least one checking account and one savings account.  The checking account (a suggested 80% of your income) is the money you spend from.

Your savings account (a suggested 20% of your income) is the money you don’t touch.  It’s the money you’ll use when unforeseen circumstances arise. 

And, let’s be honest, in an emergency situation, you don’t want to be worried about where to pull money from… Or worse, if you have enough money to handle this situation and your necessary living expenses.

2. It helps you achieve your savings goals

When we posed the question “How many bank account should I have?” the answer was at least two for a reason.  That’s because one checking and one saving account are the baseline foundation experts recommend. 

After that, you’re more than welcome to open more accounts, so long as you have a specific reason.  For example, opening another savings account in order to buy a house or save for college is a great idea!  That way you won’t mix up what money in your accounts is for what cause.  And, if you want to learn more about how to save money effectively, click here: How to Save $20,000 in a Year.

3. It doesn’t affect your credit

One common misconception people think of when they hear “How many bank accounts should I have?” is that more bank accounts equal worse credit.  This in itself is not true.  The only thing that affects your credit is how well you do (or don’t) manage your money. 

And, as we discussed before, people with at least one checking and one saving account usually manage their money better. 

So, the bottom line?  If you think opening another bank account will help you organize your finances better, then do it.  If you feel it’ll overwhelm you and just be another frustrating thing to add to your to-do list, then don’t.

4. It keeps your money safe

Let’s be honest, sometimes, life doesn’t go as planned.  Unfortunately, bank account security can be compromised and your hard-earned money can be at risk.  While we don’t wish this on anyone, having two bank accounts can make this unfortunate situation a little bit easier.

All your money in the jeopardized account can be transferred over quickly to your account that’s safe.  Plus, you’ll have peace of mind knowing that your funds in the second account are safe and uncompromised.

5. It makes for a happier marriage

In a marriage or any other relationship, of course, honesty is the best policy.  But, sometimes, a little bit of privacy can go a long way too. 

For married or serious couples, consider opening a joint checking and savings account, in addition to your personal ones.  This way you can easily separate joint expenses, like mortgage payments, couples vacations, and shared utilities with more personal ones… Like a guys night out, secret Starbucks runs, or a pedicure. 

Feel free to read more about the advantages of having joint and separate bank accounts in a relationship here: Should Married Couples Have a Joint or Separate Bank Account?

FAQ for How many bank accounts should I have

Is there a limit to how many bank accounts you can have?

The simple answer is NO.  There is no limit on the number of bank accounts you can have.  However, there is a federal limitation that exists on savings accounts, which is six withdrawals a month.  This limitation does not include in-person or ATM withdrawals.  But it is a policy you should be aware of and confirm… Along with other limitations your bank might have on account activity.

Even so, going back to the main question about limits on the number of accounts you can hold… Just because you can open an “unlimited” amount of accounts doesn’t mean you should. 

The reason we answered the question “How many bank accounts should I have?” with the number two is because two is easy to manage while still offering freedom.  Two bank accounts mean you have one for your current expenses and another as an emergency rainy day fund.  However, if you dare open another account, it might start getting confusing.  You could lose track of account usernames/passwords, accidentally overdraw, fall below the account minimum, incur a “maintenance fee,” etc.

Basically, if you can’t think of a specific reason for opening another bank account i.e. as a dedicated joint account with your spouse, or to save up for a travel vacation, then you shouldn’t open one.

How many checking accounts can you have?

Again, just like the question above, there is no limit on how many checking accounts you can have.  But still, this shouldn’t be seen as an invitation to open up as many as possible.

Whether at the same or different banks, more checking accounts equals more account numbers, debit cards, checkbooks, fees, etc.  Again, stick to our bank account golden rule… If you can’t think of a reason to open up another bank account, then don’t do it.

Is it bad to have multiple checking accounts?

Having multiple accounts of any kind is only a bad thing when they remain unchecked.  If you don’t have time to regularly verify that checking account payments are being sent and distributed properly, there’s no fraudulent activity then, by all means, go ahead and open up another checking account.

However, if you feel overwhelmed on staying on top of yet another account… Then that’s probably a sign that it’s not a good idea to open another one.

Can you open multiple savings accounts at the same bank?

Most of the time, yes!  And if there’s any type of account we recommend having more than one of, it’s savings accounts.

Typically, with savings accounts, money is only going in and not coming out very often.  Additionally, the longer your money sits there, the more money it makes (thanks to interest rates).  In other words, savings accounts are much more low maintenance.  You can regularly deposit money without worrying about meeting monthly minimums or being at risk for fraudulent activity.  

Although, again, if you can’t think of a reason to open up another saving’s account…don’t do it!  Everyone should have one standard saving account with 3 to 6 months worth of living expenses saved up.  This is an emergency fund for if you lose employment or your housing situation, incur medical expenses, etc.  

But, as we said before, if you have a specific savings goal like a new car, this is the perfect time to set up a new savings account.  This account should be dedicated to that financial goal and that goal alone!  Because, when you have a financial goal, it’s easier to track when your account balance equals your savings thus far.

Money that goes straight into your checking account often gets spent immediately.  And the money that goes into your emergency savings fund is often forgotten.  So, if you have a specific savings goal, there’s no better way to achieve it then its own savings account. Just make sure you read all the fine print of that account before opening it. I.e. Monthly maintenance fees, minimum monthly balance requirements, etc. to avoid unnecessary fees and expenses.

The Bottom Line 

So, what’s the real answer to “How many bank accounts should I have?”  Two, unless you have a specific reason to open another one.  Specific bank accounts for specific purposes encourage good savings and spending habits.  Because, after all… “If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.”

How many bank accounts do you have?  Do you feel like it’s the right number of accounts for you?  Why or why not?  Let us know in the comments below!  Because your financial knowledge makes our EveryDimeMatters Community better and stronger.  Thanks for reading, see you again soon!

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