Can You Have Two Bank Accounts? Pros And Cons Of Having Two Bank Accounts

A bank account is a financial account that is maintained by a bank and financial transaction between a bank and customer is recorded here. A bank account is a very important financial element because people save money in bank accounts and then use the money for day-to-day cash deposits and withdrawals. Therefore, having a bank account is very important but is it a good idea to have multiple bank account, and can you have two bank accounts?

When it comes to bank accounts there is no law available that forbids you to have multiple bank accounts. Almost all banks allow their customers to open as many bank accounts as they wish but you have to pay fees for every bank account that you will open. Moreover, if you have multiple bank accounts then it may take a bit of extra legwork to keep track of your all accounts.     

How Many Bank Accounts Should You Have?

To keep your financial records organized you should at least have two bank accounts, a checking account, and a savings account. You can link your checking account and savings account so that you can easily transfer money between the two accounts whenever you want. While opening bank accounts try to have two accounts in the same bank because that way you can easily control the accounts. There are many reasons you might need multiple accounts. Some common reasons are – 

1. You might need a checking or savings account separate from the joint account with your partner

2. You might need a bank account for quick money as well as want to save money for the future

3. You want to take advantage of special interest rates offered by different banks

4. You want to enjoy the benefits of online banking along with the local community banking facilities

5. You need a business account to separate your personal finance

Types Of Banking Accounts

There are various types of banking accounts available. They are – 

1. Personal Checking Account

2. Savings Account

3. Joint Accounts

4. Investment Savings Accounts

1. Personal Checking Account

At a minimum, you must have a personal checking account. This is a type of banking account where you can deposit funds and can access the fund anytime on-demand either by writing checks against your account or by using a debit card. With a checking account, you can easily track your expenses. Moreover, personal checking account gives you a record of your expenses that you might need for various purposes like documenting allowable tax deductions, etc. You can consider having two checking accounts; one for paying bills and depositing money and another for the money that you will spend.    

2. Savings Account

If you want to save money for various goals then you must open a savings account. In fact, you will get benefit from opening multiple savings accounts. Opening saving accounts for separate goals will give you a clear understanding of your individual progress for each goal. While opening a savings account make sure you compare all the banks to find out which bank is offering the best interest rate to give your money the best value.    

3. Joint Accounts

Many married couples prefer to have a joint bank account because opening a joint account can benefit from opening and using a joint account. In a joint bank account, both husband and wife have legal access to the account and its balance at any time without the permission of the other spouse. This type of bank account is good for managing the family’s finances and money goals.   

4. Investment Savings Accounts 

If you are planning for a long-term retirement plan and want to invest in stocks, bonds, mutual funds, or CDs, then you must have a separate investment account to keep track of all your different investments. This type of bank account helps you to keep all your investment-related financial records separate from your business or personal finance.

Pros And Cons Of Having Multiple Bank Account

Pros Of Having Multiple Bank Account	Cons Of Having Multiple Bank Account
With multiple bank account, you can easily track different savings goals.	It takes a lot of time to manage multiple bank accounts. For example, you have to track account numbers, fees, interest rates, and debit cards for each account.
You can protect your balance with multiple bank account. The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per person, per bank account.	Another problem of having multiple bank accounts is maintaining the minimum balance for each account. Many banks charge extra fees if you aren’t able to maintain the minimum balance!
Having a separate bank account is like putting your eggs in different bags. In case of a problem, you can easily access your money.	For every bank account, you have to pay annual fees. So, the more bank account you have the more fees you have to pay.
Different banks and credit union offers different interest rates, fee structures, credit cards, and perks. So multiple accounts in various banks will allow you to enjoy all the benefits.	Many banks pull a credit report when you apply to open a new account. So, opening too many bank accounts can have a negative impact on your credit score.
With multiple bank accounts, you will be able to enjoy all the bank bonuses.	If you have opened many bank accounts against your name, then some banks might flag you as a risk. It will affect your interest rates and ability to get credit.

How To Manage Multiple Bank Account

If you have multiple bank account then it is very important for you to manage those bank account properly. You must have a system to manage your multiple bank accounts. Here are some tips to manage your multiple bank accounts – 

1. You can use a spreadsheet to track each bank account. You should maintain a separate note for interest rates, minimum balances, fees, and transaction limits of every bank account.

2. There are various finance apps available that you can use to maintain all your bank accounts from a computer or your smartphone. Two popular apps are Personal Capital and Tiller.

3. You can use automated software and this way you won’t have to rely on your memory to remember everything and make transfers, deposits, and withdrawals.

FAQs About Can You Have Two Bank Accounts? Pros And Cons Of Having Two Bank Accounts

References:

1. https://www.forbes.com/advisor/banking/when-to-open-multiple-bank-accounts/
2. https://www.thebalance.com/can-i-have-checking-accounts-at-multiple-banks-2385847

Last Updated on February 9, 2022 by