Consider The Benefits of Having Multiple Bank Accounts

Blog | December 6th, 2021

As we suddenly see ourselves exiting childhood, becoming a teenager, and landing in adulthood, the first thought that usually arises is money. How to make it, how to spend it, and most of all how to save it. The most obvious thoughts are about bank accounts. That’s easy enough, right? Just open a checking and savings account and you’re good, or are you? Well, there may be a few more options needed to make your future financially secure.

Check Out Your Options

There are actually several different kinds of accounts that will work to your benefit, so take advantage of more than one. Starting a basic savings account has its drawbacks because there’s always a need or a want to dip into it. A solution may be asking your boss about retirement funds or an option for direct deposit straight from your paycheck. What you don’t see won’t hurt you and you’re less likely to borrow from an account that has penalties. Keep in mind the penalties are not always a bad thing. These can help you stay structured and think more than twice before you spend which will keep you on track for saving. 

If you want a little more access than the 401(k) and retirement savings options allow, inquire about your employer splitting your paycheck and depositing part of it into a basic savings account at your bank. Different accounts will help you budget by having goals for each. Also, you’re less likely to go through a savings withdrawal than you are to swipe a debit card that gives immediate access to your available cash. 

More Can be Better

Many banks will allow you to set up multiple savings accounts with no penalties or fees. Each account will have a purpose without the feeling of having money sitting and waiting to be spent. Also, money in your savings account is insured. Most banks ensure each account up to $250,000. Having separate accounts will keep you from exceeding that amount should you be fortunate enough to save that much! This way, if problems arise, more money will be protected without the risk of a great financial loss.

Checking Accounts

Bank accounts aren’t just for saving. They offer protection and convenience as well. When you need your credit to come through for a major purchase, your bank accounts will be a major backup in showing your financial status. Having a checking account will allow you to make purchases with immediate payment, just like using cash. You can pay bills and make purchases with your debit card. Just remember to keep up with what is in your “bank wallet” to keep you from overdrafting! A big plus of a checking account is being able to withdraw money from an ATM with your debit card. 

Open Accounts in Different Banks

This is similar to what we mentioned above. It’s for your protection. If you have all of your eggs in one basket, or all of your money in one bank, and that company fails, you do too. Having your money divided is insurance in itself by protecting you if a “one and only” bank goes out of business.

His and Her Accounts

So you’re committed to a partner and the mentality of what’s mine is yours and what’s yours is mine feels like a great sentiment. However, that can often backfire. Let’s say you have a joint account with your spouse and he or she doesn’t share your financial strong points. Credit scores can drop, bankruptcy can happen along with other misfortunes that could drain your entire account. Having separate accounts offers security while also giving you independence and freedom. This is not about keeping secrets or being deceitful, it is simply about protecting finances for the both of you.

Summing It Up

Saving sounds easy but it can become overwhelming quickly. Having different bank accounts can divide your goals and necessities, giving you a clearer picture and pathway to how you save and spend. You don’t need an account for every goal but by dividing your finances into smaller increments you can designate and divide more efficiently. For example, have an account set aside for emergencies such as medical bills, car repairs, and additions to your family. Have another account for the things you want such as a new home, car, vacations, etc. Only you can plan your future but having clear-cut accounts for each set of needs, goals, and dreams will allow you to watch the growth, encourage saving, and know exactly where your money goes!

Related: Budgeting 101: The One-Month Cash Challenge