How Many Bank Accounts Should I Have

Although increasing finances can be great for your pocket, managing those finances can become quite challenging. At some point in your adulthood, the question “How many bank accounts should I have?” may arise. But you should know that having multiple bank accounts are necessary to manage your finances more efficiently. The key is, to begin with having bank accounts that you need, followed by the ones that would be beneficial to you for specific purposes. Let’s explore more!

Three Types of Bank Accounts You Need

Checking Account 

A checking account should be maintained to handle all your monthly expenses and purchases. Considered as the main operating account, it is the center for all your banking flows. A checking account should help to pay bills, transfer funds, accept paychecks and complete regular transactions. 

To keep things easy, it is advised to have a checking account in a local bank so that you can easily visit the location if you need any assistance. You can also have an online bank but that would limit interactions to phone calls or emails only.

Savings Account 

A savings account is necessary for all the additional money that you have left after completing all the monthly expenses as well as emergency funds. A high-yielding savings account will allow you to receive higher interest rates as long as you maintain a minimum required balance and prevent withdrawals. Paying about 1% to 2% on your account balance, a high-yielding savings account is ideal for keeping your sinking funds. Although the terms and conditions for a savings account may differ for each bank, you cannot withdraw money through ATM, and even if you do there’s a penalty.   

Money Market Account

Some people prefer storing emergency funds in a different bank account, a money market account. It’s a hybrid saving and checking account that should be used as a secondary source of expenditure. Unlike a savings account, a money market account requires the maintenance of a higher balance. 

With that comes a higher interest rate in comparison to a high-yielding savings account. Money market accounts in most banks allow writing checks which are convenient during emergencies.

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Other Types of Bank Accounts for Specific Purposes 

Certificates of Deposit

Certificates of Deposit (CDs) are the type of bank account where the deposited money can be only be withdrawn by time increments such as 3-month, 6-month, or 12-month, or more. The advantage is a higher interest rate for the period when you cannot draw money. However, keep in mind that there’s a penalty if you withdraw money before reaching the fixed period.

Business Bank Account 

A business bank account is ideal for entrepreneurs who would like to store money specifically for their business. Quite similar to the functionality of a checking account, a business account has quite a few benefits such as an easier tracking of business transactions, involvement of multiple partners for writing checks or completing transactions, and of course allowing keeping personal and business expenses separate.

Brokerage Account 

A brokerage account is a type of flexible investment account that allows the buying and selling of stocks, bonds, mutual funds, etc. through a licensed broker. 

Foreign Currency Account 

Ideal for people who often travel abroad either for business or pleasure, a foreign currency account does not charge any fee for foreign transactions whereas a regular bank account will charge a fee ranging from 0.20% to 0.50%. 

What are the Benefits of Having Many Bank Accounts?

1. Budgeting

Having multiple bank accounts allow you to have specific financial goals along with the ability to allot money for certain purposes and emergencies. For example, you can bookmark money for a vacation next year in your savings account, and put aside the down payment for a potential new home in your money market account. 

2. Utilize FDIC Coverage

If you have over $250,000 it is advisable to split the money into different accounts since the Federal Deposit Insurance Corporation (FDIC) insures up to $250,000. Therefore, if you have any amount more than that in a bank account there will be a risk of losing it if the bank goes bankrupt. 

3. Allows Access to Some Funds at All Times

Putting your money in a different savings account or money market account provides you access to a certain amount of money at all times especially during emergencies. For example, even if you have $50,000 in a single account you’ll be in trouble if the species goes under.

4. Different Benefits from Different Banks

Different banks have different perks with varying interest rates and offers. Having multiple accounts will allow you to secure the benefits from different banks such as acquiring high-interest rate from high-yielding savings account and flexibility from checking account. You cannot get both in a single bank account.

Do Too Many Bank Accounts Have a Drawback?

Generally, having many bank accounts are quite beneficial to everyone as we have discussed above. However, it can be challenging to manage money if it is dispersed among several accounts. To prevent any overdraft fee, you should know how to keep them organized. You may look into this to learn how to manage money in multiple bank accounts. 

Another drawback is a delay in the transfer of money between external accounts. Usually, it takes about two to three working days to transfer money as it needs to be verified by both banks. However, this shouldn’t be troublesome unless there’s an emergency.


Multiple bank accounts help in broadening your financial opportunities. Ideally, everyone should have at least a checking account and a savings account. You can gradually open other accounts based on your financial requirements. 

As long as you put your monthly expenses in the checking account, and the rest in the savings account it will enhance your financial status. 


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