This may seem a strange question, but choose how you manage your bank savings is one of the most important financial decisions you'll make. Financial success requires financial planning, which is a decision you will probably need to do over time that your finances are changing. But what exactly are the reasons you might want to have more than one savings account? And is there an ideal number of accounts that you should have?
Having more than one savings account can be useful when ...
Although this decision is ultimately a personal matter, special circumstances may promote the need for more a savings account. Here are some examples of times when having multiple accounts can help.
1. You need a lot of money easily accessible. If you save a lot of money for a major purchase like a house, you may want to consider multiple savings accounts, the traditional savings accounts offer greater accessibility to funds of other savings options. Similarly, if you have over $ 250,000 (the limit of insurance of the FDIC) in one bank, you may want to consider splitting your money between different banks. The reason being that if something happens to the bank and you have one account, you will lose any savings in excess of $ 250,000, which is current FDIC guaranteed payment per depositor, per insured bank by the FDIC.
2. You want to avoid federal regulations D. FRB 12 CFR 204.2 (d) (2) D or the federal regulation is the regulation establishing the familiar six monthly limit withdrawal savings accounts. If you want to withdraw money from more than six times a month, one way to do this is to have more than one savings account.
3. It is used as a measure of cybersecurity. In some cases, losing a debit card or be the victim of a data breach could mean a bank account being compromised. If your money is dispersed across multiple accounts, you need not worry about losing everything. Remember, this is not a perfect tip prevention, as someone may be able to access your bank account as a whole, especially if you use passwords, and view all your accounts; However, if one account is compromised, which can provide a sense of relief. Also, if your bank offers two-factor authentication, such as Ally Bank and Everbank, you want to be sure to allow it, as you will be alerted whenever someone logs into your account.
4. You have different savings goals. The money for retirement should not be used for holidays, like money in an emergency should not be used to buy the new gadget you've been eyeing for months. But when you have a savings account, which is essentially what you are doing - you overlap money for different purposes. Unless you are keeping perfect spending records, with a lump sum of cash in one account might lead you to use funds to cover an expense for another. As such, it is best to have an individual account for each savings goal or major future expenditure to ensure that funds are kept independent of each other and more manageable.
5. You have a side job. If you use a side business while working your 9-to-5 or freelance to earn some extra money, it is best to keep the money made from these activities separate from your accounts key, especially if you need to fund these activities. Not only will this help you avoid wasting money designated for your work aside, but it will also be very helpful come tax season, all your transactions for next concert will be to and from a single account.
How many accounts you have?
The next question you might ask is how many accounts you should open. This question is much more difficult to answer, because it is mainly personal preference. As long as you follow their rules to maintain active accounts, most banks have no limit on the number of accounts you can have open. Ultimately, there is no ideal number of bank accounts to have; in fact, you are not even limited by the number of different banks, you can use at one time. Some people may benefit from having many separate accounts between different banks so that they do not see money they want to save. Conversely, if you have a lot of self-control and an eye on your spending, one or two accounts at one bank might be good enough for you. Note that if you have a large sum of money you want to set multiple accounts, you'll want to make sure that you put in several banks, the FDIC insurance covers $ 250,000 per depositor, per insured bank FDIC .
When this decision, there are really only two major considerations to keep in mind. You must first decide how much of your money should be in a bank at some point. Because of how low interest rates are, you will not get the most for your money if all your money is in savings accounts. As such, you should look into other financial instruments such as certificates of deposit or stocks and bonds. Keep in mind, however, that money in these other accounts will be "linked", which means unlike savings accounts, these other instruments are more difficult to collect (or if you make withdrawals, you'll probably have to pay a fee) because they are designed for long-term investment tools. The other consideration is that you should be aware of all account minimums and starting balances. Failure to pay attention to what could end up costing you in the form of fees, even using online banks.
For more information on online banks, credit cards and other topics, follow our blog on personal finance. And if you're interested in starting your first, second or seventh savings account, you should check our online savings account reviews to see offers from some of the best banks in the industry.