Some people can get away with using one bank account, while others need two or more to live comfortably.
How about you? How many bank accounts do you need? If you cannot answer this question, you aren’t alone. Many people wonder how many accounts they need to maximize their finances. Unfortunately, there isn’t a one-size-fits-all solution for everyone. Different needs entail different solutions. However, there are plenty of good reasons to open multiple accounts. Of course, there will also be downsides to this.
In this article, we’re going to talk about the reasons behind opening multiple bank accounts, along with the cons:
Good Reasons to Open Multiple Bank Accounts
There are plenty of excellent reasons to open up multiple bank accounts. For instance, if you are running a business, you will need at least two different accounts to keep your personal account separate from your business account. This ensures you won’t mix up your transactions and make your business and personal life unnecessarily complicated.
For those that do not own a business, reasons can include dedicating specific accounts to save up for certain occasions. For instance, you can open up another account apart from your main checking or savings account to hold your funds for an upcoming vacation or holiday shopping spree. Of course, you can do the same to save for a big financial goal, like purchasing a home. If you live with a partner, then setting up a joint account is a great way to share expenses, like utilities, groceries, and more.
Apart from the previously mentioned reasons to open multiple accounts, other great reasons also include qualifying for a checking bonus, applying for perks, setting up automatic bill payments, and more. So really, there are endless possibilities and reasons to open up multiple accounts, and this all depends on your financial goals.
The Cons of Opening Multiple Bank Accounts
Although you may have all the benefits from opening multiple bank accounts, you must be wary of the cons to ensure you do not run into trouble.
With that in mind, the first con is that you may not realize how much money you have in each specific account. While this may not be much of an issue if you keep them above a minimum balance requirement, there’s a risk of fees and penalties were you to mismanage your accounts. With only two or three accounts, this may be easier. However, if you have plenty of accounts, these fees will quickly add up and become annoying.
A worst-case scenario for having multiple bank accounts is if someone has stolen your credentials and identity and is now taking money from your bank. Unfortunately, you may not realize that the thieves are withdrawing money from your account, and there’s a high risk that they also have access to most, if not all, your accounts.
In other words, security is your biggest concern when running multiple bank accounts. However, with good security habits, having multiple bank accounts can be a blessing, especially if you have multiple financial goals that need to be kept separate for tracking purposes.
From creating a business account to creating a joint account to share expenses with your spouse, there are just so many reasons to open multiple bank accounts. However, before you go ahead and open them, be ready for the responsibility of maintaining these accounts and keeping your credentials safe. Only this way can you maximize your bank usage to help you achieve your financial goals.
Good Neighbors Credit Union offers help to under-served individuals to build solid financial foundations for a brighter future. If you are looking for a credit union in Buffalo, NY to help you achieve your financial goals, work with us today!