Did You Know That You Need More Than Two Bank Accounts To Build Wealth?

Those who are getting more organized with their finances now might be wondering whether or not one bank account is enough. They might have friends who have multiple bank accounts for different reasons. It’s one of the most common questions especially by those who are starting to be financially independent.

“The Budgetnista” Tiffany Aliche, personal finance expert, said at OneUnited OneTransaction conference (as reported by Business Insider) that having 4 bank accounts would be the best in terms of budgeting and meeting other financial goals.

She further said that these bank accounts serve different purposes. The two are savings accounts and the other two would be checking accounts. 

This, however, is only a guide for those who have larger funds and huge amounts of money that they can separate and meet the minimum balance requirements of banks.

Multiple bank accounts can be interpreted in two ways: First, you may choose only one bank and open their savings and checking account offers. Second, you may look for different banks and open one account in each. It doesn’t matter which of the two options you choose as long as these goals can be achieved by such.

Here are the advantages of opening several accounts: 

#1 . Security 

Financial fraud and cybersecurity attacks are rampant these days. If you put all your funds into one bank only, and if that account became the target of these attackers, then all your funds and savings would be lost forever. Different banks also have different security features so better take advantage of that. 

#2. More Financial Perks 

Different banks have different perks for their account holders. Find the ones with the lowest interest rates, minimum maintaining balance, and lower transaction fees. There are certain banks which are usually preferred by online merchants for payment, so these banks might be the good choices to put your shopping funds into. 

#3. Your Funds Are Well Accounted For

Your checking, savings, and emergency funds are better to be put in separate places. It’s a good money-saving hack to avoid overspending and to know which of these accounts would need more funds. You can’t just put everything into one bank account that you can access daily. Seeing those 5- or 6-digit figures you've accumulated over time can be tempting, especially if you have a habit of splurging. Keeping them all in separate bank accounts according to purpose will calm your impulse tendencies. 

#4. Take Advantage Of The Insurance Coverage

FDIC-insured banks offer insurance up to $250,000 per depositor. If you have $500,000 put in only one bank account and this bank fails, you will only get the maximum coverage of $250,000 back. Whereas if you put the other half to another bank, then all your funds will be insured and protected. 

Basically, the idea of opening more than one bank account is to give depositors some peace of mind and more control over their funds. These multiple bank accounts serve different purposes, aside from the advantages of keeping your funds in separate places for security purposes. Before you decide to do this, research the bank accounts or the best bank to put your money to. It should fit your needs especially the balance requirements to avoid being penalized.