Should you bother with more than one bank? Here’s how to know whether you should spread your money around or commit.
Choosing the right bank account is important. After all, it’s where you’ll house your hard-earned cash. But what if you can’t choose just a single bank? Here are a few benefits and drawbacks of keeping your money in more than one spot.
Pro #1: You can meet different savings goals
Having more than one bank account could make it easier to keep track of your various savings goals. For example, you might decide to open one savings account to house your emergency fund, another where you store cash for a down payment on a home, and a third to save up for a big trip.
Pro #2: You might enjoy different benefits
It’s natural to look for certain things in a bank. For example, you might want competitive interest rates, great customer service, and low fees. If you keep your money in multiple banks, you may get more perks. For example, an online bank might offer a higher interest rate on your savings but no convenient ATMs. Meanwhile, a physical bank may not be able to offer the same interest rates on savings but have plenty of convenient locations as well as an extensive network of easily accessible ATMs.
Pro #3: You can try out a new bank before cutting ties with your current one
Switching banks isn’t an easy thing to do. In fact, in a recent study by The Ascent, more than 48% of consumers said they’re unlikely to switch to a new bank, even if they have reason to believe it would be a better fit. Opening multiple bank accounts, on the other hand, lets you try out a new bank while still enjoying the perks of your old one. That way, you’ll be in a better position to decide which is a better long-term fit for you.
Con #1: It’s harder to keep track of your money
With a single bank account, it’s easy to pull up your balance on screen and monitor your spending. If you have money in multiple banks, you may have a more difficult time tracking your balances.
Con #2: You might increase your risk of incurring fees
Some bank accounts require a minimum balance to avoid fees. If you split your money between different accounts, you risk dipping below those minimum thresholds and getting charged. If all your money is in the same place, you’ll be less likely to cross that line.
Con #3: You might increase your risk of fraud
Ideally, any bank you choose will have solid security and fraud protection measures in place. But the more accounts you have, the more likely you are to be a victim. You’ll be giving criminals an opportunity to access your money or personal information in more than one place.
Clearly, having more than one bank account is a mixed bag. If you’re going to go that route, make sure there’s a good reason for it. If, for example, you’re able to score a higher interest rate with an online bank but need a physical bank for certain transactions or services, like a safe deposit box, then it makes sense. But otherwise, you may want to keep all of your money in the same place.