How Many Bank Accounts Should I Have?

5.25 MIN READ

If you have multiple financial goals, you should have multiple bank accounts. Why? It helps keep you on track financially. If you keep all your money in one bank account, you may spend more than you planned, leaving you short on some of your financial goals.

You probably wonder, ‘how many bank accounts should I have?’ While we can’t give you an exact number since it’s a personal decision, we’ll guide you in the right direction so you make the choice that’s right for you.

What’s the Maximum Number of Bank Accounts You Can Have?

First, there isn’t a maximum number of bank accounts you can have. If you want ten bank accounts, you can have ten bank accounts, and if you wish to have only one bank account, you can have just one.

However, there are limits regarding how much of your money will be covered by FDIC insurance. Overall, you can have up to $250,000 insured at one bank across all accounts at that bank.

But, if you have some money at one bank and other money at another bank, you can have up to $500,000 insured since they aren’t at the same bank. That’s another reason to consider spreading out your money and having multiple bank accounts.

What Type of Bank Accounts Should You Have?

Since you can have as many bank accounts as you want, what type of bank accounts should you have?

Again, it’s up to personal preference, but ideally, you’ll have a mix of checking accounts and savings accounts.

Checking accounts are your ‘spend’ accounts - the accounts you spend money from, whether it’s bills or other spending.

Savings accounts are for the money you want to set aside for future financial goals, whether an emergency fund, rainy day fund, vacation fund, or retirement. Savings accounts can be regular savings accounts, online high-yield savings accounts, or even CDs.

How Many Bank Accounts Should You Have?

The correct number of bank accounts for you depends on what you can handle. If you can manage ten bank accounts and that’s what you need to stay organized with your finances, do it. But, if you can’t stay organized with your bank accounts, meaning you can’t stay ahead of the fees and minimum balance requirements, it could cost you more money than necessary to have multiple bank accounts.

Ideally, you should have the following:

A checking account for your fixed bills, such as your mortgage, car payment, utilities, phone bill, etc.
A checking account for ‘fun spending’ or unnecessary spending, such as eating out, subscriptions, shopping, or even unlimited data plans
A savings account for your emergency fund - or money to cover three to six months of expenses if you lose your job or become unable to work because you’re hurt or ill
A savings account for a rainy day fund - or money to cover unexpected expenses throughout the month that aren’t in your budget, such as home or car repairs
A savings account for each financial goal you have, such as a vacation fund, retirement fund, or college savings fund

The Downside of Having Too Many Bank Accounts

Multiple bank accounts can have some downsides, especially if you are not prepared for the work involved.

Some of the downsides include:

It’s harder to keep up with your deposits and withdrawals
It’s easy to deposit or withdraw money into or from the wrong account
You may end up paying overdraft fees or monthly maintenance fees if you don’t have a high enough balance
It takes more time to track all of the accounts

Factors to Consider When Opening Bank Accounts

Before you open a bank account at any bank, consider these factors:

Look at the minimum balance requirements. Can you meet them? If not, you’ll likely pay a monthly maintenance fee, which can defeat the purpose of opening multiple bank accounts.
Know the APY. Not all bank accounts pay interest, but if that’s your point in owning multiple bank accounts, look closely at the APY. Some banks have tiered interest rates, paying higher interest rates for higher balances, so know your limits and how to maximize your earnings.
Don’t keep over $250,000 at one bank. Split up your bank accounts across multiple banks. A good rule of thumb is to have online banks for the higher interest rates and then a couple of accounts at brick-and-mortar banks to have money local and avoid going over the $250,000 limit.
Know the bank account rules. If you open savings accounts, only deposit funds you can leave in the account. Most banks allow up to 6 withdrawals from a savings account before they penalize you and/or switch your account to a checking account.
Consider if you need a debit card for each bank account. If you do, look for bank accounts that offer a free debit card and an extensive ATM network, so you aren’t stuck paying out-of-network fees.
Know the bank’s perks. Some banks have sign-on bonuses; others offer cashback on certain purchases made with the debit card. Know what each bank offers and take advantage of each chance to earn more money.

Tips to Manage Your Bank Accounts

If you have multiple bank accounts, consider these tips to keep yourself organized:

Set up online access for every bank account to ensure you’re up-to-date on all your bank accounts.
Track all transactions in one app, such as Mint, to ensure you are on the right track for each goal.
Switch bank accounts if you can’t keep up with a bank’s requirements and end up paying unnecessary fees.
Set up direct deposit with your employer, splitting your paycheck between each account. This can help you stay disciplined and ensure you save enough money for all your goals.
Make sure you can easily transfer money in between accounts to allow you to play with your financial goals.

Final Thoughts - How Many Bank Accounts Should I Have?

Having multiple bank accounts keeps your money separate and gives each account a ‘job.’ While it takes more time and you must be organized, if you have multiple bank accounts, you’ll maximize your FDIC coverage, possibly increase your interest earnings, and may even be eligible for various bonuses, helping you grow your money even faster.

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