Disclosure: This post was submitted on behalf of PennyMindingMom.com.
For many people, their personal New Year’s resolution was to get their finances in order. Getting your bank accounts under control or having your KYC done by Fully-Verified lifts a huge weight off your shoulders and reduces your stress.
You may not believe it, but about 18 million Americans still don’t have access to a single bank account! While other people have way too many and have spread themselves too thin.
But how many bank accounts should you have? How do you know when and where to open a new account?
Don’t worry, we answer these questions and more to help you get started. Keep reading to learn all about having more than 1 bank account.
Why Should You Have More Than 1 Bank Account?
There are many reasons to have more than 1 bank account, depending on what your financial goals are. You could choose to have several savings accounts that have high annual percentage yields (APYs), but are intended for different goals. Separating money meant for different things makes it easier to stick to a budget also!
Business owners also need more than one bank account. They need (at least) 1 checking account for their business and 1 for their personal expenses.
How Many Bank Accounts Should You Have?
We would love to tell you that there’s a magic number of accounts that you should have, but that’s not the case. Each financial situation is different and what’s best for you may not be best for someone else!
For most average working-class people, two bank accounts should get you by: a checking and a savings account. The checking account is where you keep the money you intend to spend either on monthly expenses or everyday purchases. Your savings account should have only the money you want to save up for later or for a specific goal.
If you have several savings goals, you could open separate accounts so it’s easier for you to keep track of those goals.
For those with a business, as we mentioned earlier, you’ll also want to open a business account to separate the business’s finances and your finances. For financial and legal reasons, you should avoid blending your business and personal accounts at all costs!
How to Pick the Right Bank to Open an Account With
When you feel like it’s time to change banks, or if you want to open a new account, it’s important to know what to look for in a new bank before you sign any legal paperwork. Here are a few things to look for.
This is one of the biggest problems with some banks. You think you’re getting a “free” account, but then you notice monthly fees hitting your account!
Banks cannot hide their fees though, so be sure to go through all the paperwork describing the account and take note of any fees and how often they charge them to your account.
Another kind of fee to know about is ATM fees. Most banks offer free ATM withdrawals for “in-network” ATMs.
Make sure you know how to tell which ATMs qualify as “in-network” for your bank. Otherwise, you could end up paying outrageous ATM fees!
Some bank accounts have a required minimum balance, which means that you need to keep at least that amount of money in the account to avoid a penalty fee. Try to avoid using accounts like this unless the minimum balance is chump change.
See if your banker would waive the minimum balance if you set up a direct deposit to the account. That way, you won’t ever need to think about how much money you have in the account!
Make sure you find the best bank for you and your financial situation!
Advice About Opening and Closing Bank Accounts
Before you open an account, read all the paperwork and disclosures before signing anything! Ask questions if you need any clarification.
Also, be sure you need a new account. If you have a hard time keeping track of your open accounts and/or you’re looking at the account “freebies” instead of the account itself, you should walk away from the free toaster! Don’t spread your money too thin or you could end up with a headache later.
As for closing bank accounts, be sure you want to close the account, then inform the bank. If you leave the account at a 0 balance, you could still incur regular account fees, then they charge overdraft fees caused by the bank fees—it’s ridiculous! When you’re done using an account, close it down, once and for all.
A Penny Saved Is a Penny Earned
The main goal when choosing where to do your banking is to save as much money as possible. So approach each new account with that in mind.
No matter how you choose to do your banking, it’s important to do periodic checks to make sure you’re still getting the best possible rates and perks out of your bank. Be sure to shop around too, because some banks run special deals to customers when they open a specific kind of account.
Also, keep in mind that the answer to the question “how many bank accounts should you have” will change as your lifestyle and situation change. Whenever you have a big life event, check in on your banker to make sure you’re doing the most to keep as much of your money as you can.
We hope you enjoyed reading this article and that you learned a thing or two about having more than 1 bank account. If you need more information on saving money, family, home, and reviews, check out the rest of our blog today!