How Many Bank Accounts You Should Have

Knowing how to bank effectively is a big part of being financially responsible. Different banks can have advantages over others. Employing different banking techniques can improve how you budget your money. One of those techniques is having multiple bank accounts. So, how many bank accounts should you have? Read on to learn more.

A financial advisor can build a financial plan to help you achieve your financial goals.

How Many Bank Accounts Should You Have?

How many bank accounts you should have depends on your spending habits. In general, having three to five bank accounts can be helpful for managing your money.

For instance, if you’re married, you may share a joint checking and a joint savings account with your spouse. You and your spouse may also decide to have individual checking and savings accounts. That adds up to four accounts for each person.

The joint accounts can be used for expenses, emergencies and savings goals, while individual accounts are dedicated to your own savings and purchases.

If you’re single, having three or four accounts might make sense. It’s best to have at least one bank account that is a dedicated emergency fund, another savings account for large purchases you plan to make in the future and a checking account for everyday spending.

How Many Savings Accounts Should You Have?

You should have at least two savings accounts: an emergency fund and an account to save for big purchases. Your emergency fund should have enough to cover at least three to six months’ worth of living expenses. Your other savings account is where you put cash to cover specific purchases you plan to make in the future, such as a nice vacation or a down payment on a vehicle.

Some experts recommend having three savings accounts. In this situation, you’d have your emergency fund, but then you would also have one account for long-term savings and another for short-term savings. The long-term savings account is for expenses like having a baby or to cover the down payment and closing costs on a house. The short-term savings are for smaller expenses you’ll cover within the year, like holiday gifts or paying your car registration.

How Many Checking Accounts Should You Have?

A man checking his bank account on his mobile app.

The number of checking accounts you should have ultimately depends on your needs, but you should have at least one. If you have joint accounts with a significant other, you may want to have an individual checking account for yourself, as well.

You could have multiple accounts organized by the types of expense, too. While it may seem a little daunting to have multiple spending sources, it can help you keep your finances organized.

The envelope budgeting method is one way to manage multiple checking accounts by using three accounts:

Monthly expenses: This account pays for things like utility bills, debt payments, housing costs and auto expenses.
Weekly expenses: This account covers expenses like groceries and gas, along with other frequent essentials.
Discretionary spending: Your third account covers non-essentials, such as entertainment, eating out, shopping and more.

When determining how many bank accounts you should have, the truth is that there’s no limit. You can have as many as you can get, but keep in mind that having too many can be confusing and expose you to additional risk.

5 Reasons Why You Should Have Accounts at Multiple Banks

There are also upsides to having accounts with multiple banks.

1. Keep Finances Separate from Significant Other

If you decide to open a joint account with your spouse or significant other, it can be smart to keep your individual accounts. It’s healthy to have separate accounts for your own financial goals and expenses. As long as you aren’t hiding destructive spending habits from one another, having your own account can be a good thing. Plus, there is an added benefit – you can easily hide what you bought your partner for their birthday.

2. Take Advantage of Bank Perks

Banks often offer unique perks, like cash bonuses for opening a new checking account. However, that is not always the case. If the bank you normally use does not have attractive interest rates, you should consider researching another bank that offers a greater yield.

3. Different Banking Needs

Different banks cater to different kinds of customers. For instance, if you start a small business, you may find that your current bank has high expenses or requirements for small business checking accounts. Say you have done some research and found that a local credit union would be perfect for your business. It makes good financial sense to open an account there.

4. Prioritize Saving

If you have your savings account at a different bank than your checking account, it’s an extra hurdle to spend that money. This could be a good thing if you’re focused on saving. By making it a little more difficult to withdraw your money, you protect your savings from your own impulses to spend it.

5. Access to Your Money

While having bank accounts at multiple banks can make your money less accessible, it can also have the opposite effect. Say that you primarily bank with your local credit union, but you have taken a new job that requires some travel. Your credit union does not have bank branches outside of your state. Here, moving some of your money to a larger, national bank can make a lot of sense. You’ll be able to use its ATMs and other banking services without extra fees.

How to Manage Multiple Bank Accounts

When managing multiple bank accounts, it is important to give each account a clear role. One checking account can be used for bills and regular expenses, while another might be used for things like shopping or dining out. You can also keep one savings account for emergencies and another for big future purchases like a vacation. Naming your accounts or using budgeting tools can help you track your money and avoid confusion.

Using automation can make managing your accounts easier. Many banks let you set up transfers, set up bill payments and get alerts when your balance is low. You can automatically move money from your main account into savings or other accounts. This helps you stay on budget and avoid missing payments or overdrawing your account.

It’s also helpful to check your account activity often. Use your bank’s app or budgeting tools to watch your spending and make sure your money is in the right places. If you’re not using an account or it’s costing you fees, think about closing it. Keeping only the accounts you need makes it easier to stay organized and manage your finances.

Bottom Line

A mother and father put money in a piggy bank with their child.

When it comes to how many bank accounts you should have, the answer is, as many as you want. Ideally, you should have two to three savings accounts and one to three checking accounts. This is enough that you can manage your savings and expenses but not so many that it becomes unwieldy.

You can also consider working with a financial advisor to determine how many bank accounts are right for you based on your financial needs.

Tips for Responsible Banking

How many bank accounts you have and where you have them should be part of your financial strategy. If you don’t have a plan for your finances, then you may want to work with a professional financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area. You can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Now that you know the value of multiple bank accounts, how do you know where to bank? Thankfully, SmartAsset’s got you covered on how to choose a bank.
Once you’ve found the right bank for you, research a credit card to meet your needs. SmartAsset’s Credit Card Guide helps you find the right card, compare offers and calculate how the interest could affect your debt.