4 Reasons to Have Multiple Bank Accounts

For many people, one checking account and one savings account may sound like plenty of bank accounts, but it may not be enough. Having multiple bank accounts may help you manage your money better. And for the wealthy or high-income earners, multiple bank accounts can offer more protection. Here are a few reasons to have more than one bank account.

Different accounts for different purposes. Putting your money in separate accounts can prevent the mistake of spending money that’s earmarked for another purpose. You can, for example, keep the money for paying household bills in one bank account and your emergency fund in another bank account. You may even designate a separate account for splurging so you don’t accidentally go overspend your bill money.

Access to an alternative source of funds. If you lose your debit card or your bank experiences a technical glitch that leaves your funds available or your account is locked for fraud, having another bank account, especially at another bank, ensures that you always have access to money.

You have a lot of money. The FDIC insures deposit accounts up to $250,000 per account per accountholder for each category of accounts. You can have $250,000 in an individual account, a joint account, certain retirement accounts, and certain trust accounts. If you have more than $250,000, you should certainly consider opening a second account to ensure that your money is completely insured in case of a bank failure.

Separate accounts for different family members. Multiple bank accounts can reduce the number of money debates in households. For example, spouses may have a joint account for paying bills and separate accounts for each person's discretionary spending. Spouses can decide how much of their income should go to the household account and how much to keep separate. Or, combine incomes and divvy up what remains after all the household bills are paid.

While there are a few good benefits to maintaining multiple accounts, there are some things to keep in mind. Many banks have minimum balance requirements and charge a monthly fee if your balance falls below that threshold. If you don’t have enough money to meet the minimum balance in multiple accounts, having just a single bank account may be better for you.

Multiple bank accounts can be harder to keep track of. You must be diligent about checking the balances frequently and take care that you’re spending from the right account. With multiple bank accounts, you may have one account that's used most, while the other accounts are used only occasionally. It’s important to monitor your accounts to check for balance accuracy, fees that are charged, and to catch any fraudulent transactions.