While there is no limit on how many bank accounts you can have, how many bank accounts you should have can really depend on your own personal organization preferences. It might also be dictated by your career or family life. There are certainly benefits to having multiple savings accounts or checking accounts, but juggling more than one bank account could be tough.
How Many Bank Accounts Do Most People Have?
When it comes to managing your money, many adults have, at a minimum, one checking account and one savings account at the same bank. Of course, there are plenty of additional financial circumstances that might make you consider opening an additional account. However, for most individuals, especially those who are unmarried, opening just one checking and one savings account usually covers basic banking needs.
With just one checking account and one savings account, you eliminate confusion and can simplify your finances. If all of your paychecks go into your checking account automatically, using direct deposit, you can set up recurring automatic transfers into savings for the date after your payment hits.
This way, money moves into your savings account, while leaving what you know you’ll need in checking until your next paycheck. A number of banks, especially the larger chains, also charge monthly fees for checking accounts or require a minimum deposit to open an online bank account, so having only two accounts total reduces your amount of fees you’ll need to worry about.
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4 Reasons to Open Multiple Bank Accounts
For those who are married or starting a family, military personnel or planning extended foreign travel, freelancers or business owners, there may be benefits to having multiple savings accounts or checking accounts for different financial needs.
1. Large Transactions
While couples do not necessarily need to share all of their finances, there are certain benefits to having a joint account for your household and family. For one thing, it can help cover large monthly payments such as a mortgage, rent, or other household expenses equally.
Plus, rather than individual savings, you might want a family savings account for emergencies, like a surprise emergency room bill or car trouble. SoFi Checking and Savings® makes it easy to create one single account for you and your +1, so you both have access to your money.
2. Specific Savings Goals
Having a family savings account can also be fun, putting away money for future travel or saving up for a wedding or baby. Some couples even prefer a shared account for debt payments, though paying off your partner’s debt is a bigger financial conversation to have before you start a new bank account for that purpose.
3. Saving for College
Saving for college is another reason parents might open another bank account, or even an individual who is currently paying for school might see the benefits in having a separate checking account to manage and keep track of spending on books or other school-related costs.
4. Charity Donations or Family Healthcare
Other reasons people might consider opening additional bank accounts would be for charity donations or offering financial assistance to another family member, such as paying for elder care. But there’s probably no reason why those monthly expenses can’t also be accounted for in your regular checking or savings account.
How Many Bank Accounts Should You Have?
While there is no need to open five new savings accounts to plan for your next five vacations, how many bank accounts you should have can depend on your ability to balance organizing your finances with balancing your checkbook.
Plus, some individuals might find they prefer having at least one or two extra savings accounts for savings goals. These savings goals could be anything from an emergency fund, travel fund, or saving up for a car. Most importantly, emergency savings are key to have, and whether you want this account to be a separate fund in a different bank account, or part of your overall main savings account is really up to you.
Potential Downsides to Having Multiple Bank Accounts
• Risk incurring more bank fees.
• Have to keep track of account rules.
• Increase the chance of overdrafting.
While there is seemingly no downside at first to having several different accounts at a bank, you have to keep in mind that you risk incurring more bank fees, and you’d have to deal with the logistical nightmare of keeping track of each account’s rules and regulations.
Also, it’s important to keep in mind that the more bank accounts you open, the more likely you might overdraft on one account to pay for another, especially if you have large automatic transfers set up, trying to put aside money in different savings accounts each month.
Why Freelancers and Business Owners May Need Separate Bank Accounts
While large businesses inevitably need their own bank accounts, sometimes smaller mom and pop stores or even individuals with side hustles overlook creating a separate checking account for their business.
Some banks offer small business accounts, which can be used by freelancers, side hustlers, or small business owners. Basically, you want to make it easy on yourself to track personal and business expenses separately, and having different bank accounts helps take care of a lot of the legwork.
An additional account makes it easy to track business expenses and deductions, like shipping costs for your Etsy account or treats purchased for your dog-walking gig. Plus, with all of your business expenses in one place, you are more prepared for an audit and have a better bookkeeping record, rather than sorting through every transaction and trying to remember if that coffee you had six months ago was for a work meeting or not.
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