3 Benefits of Using More Than 1 Bank

Here's why it pays to keep your money at multiple institutions.

People open bank accounts for different purposes. You might open a savings account to keep your emergency fund safe, a checking account to pay your bills with, and a CD (certificate of deposit) for longer-term savings.

It's not uncommon for people to hold all of their accounts at the same bank, and doing so could make them easier to manage. But here are a few benefits you might reap if you open accounts at more than one bank.

1. You can capitalize on the higher interest rates online banks tend to pay

Some people are afraid to keep all of their money in an online bank. But the upside is that these banks commonly offer better rates on savings accounts and CDs than brick and mortar banks do.

The reason? Online banks don't have as much overhead. They don't have buildings to maintain, and while they have to hire staff, they can hire from anywhere, which could mean being able to pay lower salaries.

If you don't like the idea of only having an account with an online bank, it could work to your advantage to use more than one bank. You could open a checking account at a local bank that's convenient to your home or office, and then open a savings account at an online bank to score a higher interest rate on your money.

2. You can have easier access to your cash

A bank that's convenient to your home may not be anywhere close to where your office is. And that's another reason to consider using more than one bank. That way, you'll have an easier time getting access to ATMs and other resources as needed. Plus, if you travel a lot for work, it could benefit you to open an account at a second bank -- one with more locations in the places you tend to visit.

3. You get protection in case one bank has an outage

It's not uncommon for a bank to experience technical issues that render its ATMs unusable for a period of time. Online banks can have similar problems. Websites can go down, or features can break that prevent customers from being able to access their money when they need it. The upside of having an account at more than one bank is that if one institution has issues, you have a backup, as the chances of multiple banks having outages at the same time are lower.

How to find the right banks

If you're interested in opening an account at another bank (or two), there are certain perks to look for:

• Convenient hours (if you're opening an account at a physical bank)
• Great customer service
• Competitive interest rates
• Minimal account fees

It pays to do some research before opening another bank account, so in addition to digging around online, talk to the people you know about their banking experiences. Sometimes, hearing firsthand accounts is the best way to narrow down your choices and land on the bank that's right for you.