How Many Bank Accounts Should I Have?

If one bank account does precisely what you need it to do, that's great. But what if more accounts made your life easier and helped you feel more in control of your personal finances? Here, we cover how many bank accounts you should have, why more than one account can be helpful, and when having multiple bank accounts is a bad idea.

How many bank accounts should I have?

Some experts suggest you should have four bank accounts -- two checking and two savings. You'll use one checking account to pay bills and the other for spending money. One savings account will be dedicated to your emergency fund and the other to miscellaneous goals.

But the number of bank accounts you should have is not a one-size-fits-all question. After all, the purpose of opening more than one bank account is to make your life easier and more organized. How many accounts you should have depends on your goals and how confident you are that you can juggle more than one account.

If you have a single account, you may wonder why in the world you'd ever consider opening additional bank accounts. Used strategically, multiple bank accounts can help you reach a specific financial goal (whatever that goal may be). And who knows? Switching to a different bank to open an account may give you access to perks your current bank does not offer.

When multiple accounts make sense

Here are some reasons for opening more than one bank account.

A bank or credit union offers perks you like

Let's say a local credit union has the best credit card offer you've found. You're not a member of that credit union, but if you join, you'll be eligible to apply for the card. A great credit card with a low interest rate could be worth opening a new account.

Or maybe a financial institution other than your current bank provides a debit card with great perks, like discounts and bonuses. If you routinely use a debit card to pay for purchases, opening a new account could make sense.

You may have been banking with the same financial institution for years and have no interest in going through the hassle of changing all your autopays and direct deposits to another bank. But what if another financial institution offered something great, like a high-yield savings account that helped you keep up with inflation? If opening a new savings account with a higher interest rate would help you build an emergency fund or meet a savings goal, it's worth it.

Another account fits your goals

Different goals call for different types of bank accounts. For example, you may want to open a checking account near your house so it's easy to swing by the ATM when needed or check your safe deposit box on occasion. If withdrawing money from your savings account is often a temptation, you could decide to open a savings account a little farther away from home or online, where it wouldn't be quite as convenient to hit the ATM.

Having a separate account for emergency savings may also be a smart move, especially if you want to avoid dipping into your regular savings account. You can set aside a portion of your income each month in this account, which will come in handy during unexpected expenses or job loss. The point is this: It's OK to open accounts that fit your needs, personality, and financial style.

You want to take advantage of higher interest rates

Some people open a money market account or certificate of deposit (CD) because the financial institution is paying a higher APY than other banks.

What's more, some people are simply good at chasing rates. That means they'll join a credit union or open an account at a new bank as long as they earn a higher interest rate on the banking products they routinely invest in. They'll look at everything, from CD rates to the interest paid on savings accounts. They open multiple accounts so their money will work for them.

Read more: Best CD Rates

You have a business or side job

It's common for business owners, gig workers, and freelancers to have more than one account. Their personal checking account is used to pay living expenses, while their business checking account covers business expenses. Most self-employed folks find that keeping a separate bank account allows them to track income and expenditures, making it easier to file taxes.

Some business owners use the profit-first method, where they divide their revenue into different accounts. This involves opening multiple business bank accounts strategically, with reserved funds in one for profit, another for operating expenses, and still others for taxes and other financial obligations. By separating funds into various accounts for profit, taxes, and operating expenses, the profit-first method ensures that profits are not mistakenly consumed by expenses. 

You have more than $250,000

The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor, per insured bank. If you have a significant sum of money in your bank account, this limit may not be enough to provide adequate protection. One option to protect your money is to open accounts at multiple FDIC-insured banks. 

Opening accounts at multiple banks spreads out your money to minimize the chance of loss. It may seem like a hassle, but taking these steps to insure your money can provide peace of mind and financial stability in the long run. Another is to open accounts jointly with a spouse or family member, or in a different ownership category.

Multiple accounts as couples therapy

If you're in a long-term relationship, you may share a joint bank account, and that makes sense for some. It wasn't until the 1960s that women were legally granted the right to have their own accounts. Even then, most banks had zero interest in allowing those women to apply for a loan or credit card. If a woman's spouse would not sign for her, she would need her father or another male party to do so.

Today, having a separate account doesn't mean you don't care about your partner. It just means you want autonomy over the money you put into that account. For example, if you typically pay half the household bills, you may want an account that allows you to sign up for direct deposit so your paycheck is available when it's time to pay bills. Perhaps your partner would rather run by the bank on payday, deposit some of their paycheck, and keep the rest out for discretionary spending.

Or maybe one of you is a big believer in putting money away for a rainy day while the other tends to spend more. Separate savings accounts can address that issue.

Just as a joint account does not mean that a relationship is stronger, a solo account does not mean a relationship is falling apart. Given that, in a 2021 survey from the American Institute of CPAs, 73% of couples living together said money decisions are a source of tension in their relationship, it can make sense for some households to open multiple accounts.

Budgeting for the future

Finally, there are plenty of people who open several accounts at a single financial institution. Let's say you put $1,000 a month into your savings account but have different amounts earmarked for different purposes. You may want $400 to go into an emergency fund, $200 toward paying down debt, $200 to save for a new car, and $200 toward a vacation. Rather than mix the money -- and potentially spend it -- it's OK to open four savings accounts, each with a different purpose.

As long as you can juggle four accounts, check them at least once a month, and stay atop all correspondence from the financial institution, multiple accounts can help you keep track of how close you're getting to the finish line.

The best high-yield savings accounts help you achieve your financial goals. If it only takes one account to achieve those goals, that's great. But if you need more accounts and can handle them all, it's a path worth exploring.

While having multiple accounts can have its perks, it can also lead to confusion and complicate your financial life. If you find it hard to keep track of all the accounts and their balances, it’s best to stick to one or two accounts. Consolidating your finances may make it easier to manage your money and reduce the risk of overdraft fees and late payment charges.

Deciding how many bank accounts to have boils down to personal preference and finances. If you have a business, emergency fund, and specific saving goals, multiple accounts can help you stay organized and on track. On the other hand, if you are comfortable managing your money from one account and don’t want to deal with the hassle of multiple accounts, sticking to one or two accounts is a viable option. Whatever you decide, make sure to research all the available options and choose the best one for your financial situation.