Conventional wisdom holds that you should have at least two bank accounts — one for checking and one for savings. However, some consumers might be A-OK with just a single “spend/save” account that covers both their transactional and saving needs. Others still may prefer half a dozen or more accounts to optimally manage their finances.
The way you relate to your money, as well as your marital and employment statuses, will ultimately inform the number of bank accounts you should open.
No Bank Accounts? Never a Good Idea
Not everyone wants a bank account, and 4.5% of U.S. households reported being entirely unbanked in a 2021 survey by the Federal Deposit Insurance Corporation (FDIC). Some of the survey’s most commonly cited reasons for choosing not to bank were an inability to meet minimum balance requirements. Unwillingness to pay account fees, and mistrust in financial institutions.
But stashing a pile of Benjamins under your sofa cushions exposes you to major risks, as all of your capital could be stolen, misplaced, or destroyed.
If your cash reserves are currently limited or you’ve had bad experiences with big banks in the past, consider opening an account with a local credit union. These not-for-profit institutions often offer accounts with no minimum balance and no monthly fees. Membership is usually available to any resident of the credit union’s service area. Credit union deposits are insured up to $250,000 by the National Credit Union Administration. Making these accounts far more secure than holding all your money in physical currency.
One Account: For Bare-Minimum Banking
Your banking needs fall into two broad categories: day-to-day transacting and saving. While many may choose to address those needs with two separate accounts — typically a checking account and a savings account. They can potentially be satisfied in a streamlined money market account (MMA).
A good MMA has at least some of the functionality of a checking account and may support transactions like direct deposit, debits, and/or ATM withdrawals. But it might also boast an annual percentage yield (APY) that’s reasonably competitive with the top high-yield savings accounts. For instance, you might find a 3.75% APY for a money market account from an issuer that offers a savings account APY of 4.75%.
A 1% difference in interest may be an acceptable sacrifice for financial minimalists who don’t want to juggle multiple account logins. Like the idea of keeping all their money in one place. That said, using only one bank account may make it harder to keep from spending money you had intended to save.
Two Accounts: For Better Budgeting and More Features
Maintaining only one bank account might make sense if you have the self-restraint of a nun and come in well under budget every month. Divvying up your dough between two accounts helps manage overspending, providing cash for regular bills. Keeping your emergency fund at a safe, temptation-free distance. Choosing separate financial institutions for those accounts places an additional barrier between funds for spending and saving.
Financial psychology aside, opening separate checking and savings accounts allows you to choose the best-in-class offerings available for both account categories. This helps you earn extra money back on your balances while taking advantage of the full range of banking features out there.
Let’s say you move your $12,000 emergency fund out of your MMA at 3.75% APY and transfer it to a high-yield savings account at 4.75% APY. The extra 1% in APY you’ll get with the savings account will earn over $700 more during five years than it would have earned in the MMA.
And if you’d like a broader range of banking services than an MMA provides, you could then move your remaining day-to-day spending money to an old-fashioned checking account offered by a traditional bank.
Related: Checking vs. Savings Accounts: What’s the Difference?
Three Accounts: For Small Business Owners
If you own a business, maintaining at least one dedicated business banking account, in addition to your personal checking and savings accounts, holds a number of benefits, including:
- Legitimacy: Lenders may not take your business seriously if it doesn’t have a dedicated bank account, and that could be a strike against it when they evaluate your applications for business credit.
- Clarity: A separate business account factors out your personal expenditures and unrelated income streams, creating a more focused view of your business’s cash flow, profitability, and tax-deductible expenses.
- Compliance: A separate bank account is legally required if your business is structured as an LLC or corporation.
Four Accounts: For Committed Couples
A study from Cornell University’s Department of Policy Analysis and Management correlated joint bank accounts with “higher levels of relationship quality on numerous dimensions.” However, maintaining separate, personal bank accounts can help preserve a sense of individual autonomy within the framework of a serious relationship.
How Many Bank Accounts Should a Married Couple Have?
The following arrangement is a happy medium for many couples:
- One joint checking account for shared expenses, like rent/mortgage payments, insurance, auto loans, groceries, etc.
- One joint savings account for emergencies and long-term shared financial goals
- Two high-yield checking accounts or MMAs — one for each partner — that can be used for personal expenses
Though that constellation does involve private bank accounts, it needn’t involve financial inequality. All income earned by either partner can be initially pooled into the joint checking account and then equally distributed to the two personal accounts.
Pros and Cons of Multiple Bank Accounts
To invoke a tried-and-true cliche, sometimes less is more. Opening separate accounts for each financial focal point in your life may seem like a good way to stay hyper-organized. But it can also open you up to some pitfalls that are easier to avoid with pared-down banking.
Pros
- Using multiple accounts may help you budget more effectively.
- You can assemble a versatile and lucrative range of banking features.
- For business owners, separate accounts simplify your finances come tax season and, in some cases, may be legally required.
- Using joint and personal bank accounts can help romantic couples work toward shared financial goals while preserving some autonomy.
Cons
- Multiple accounts compound the time you spend logging in and out of different platforms, particularly when multi-factor authentication is involved.
- Having one account simplifies the routine financial review process (unless you’re a small business owner).
- Neglecting accounts may lead to fees assessed for overdrafts or falling below minimum balance requirements.
How To Manage Multiple Bank Accounts
Whether you ultimately decide to maintain two accounts or 20, following a few fundamental practices can keep your money safe and in the black.
Diversify usernames and passwords
The more accounts you try to juggle, the more tempted you’ll likely be to reuse login credentials.
Don’t.
Repeating usernames and passwords needlessly jeopardizes your accounts’ security. If login information for one account is compromised, potential damage from the hack is minimized if those credentials can’t be used to access your other accounts.
Check each statement regularly
Logging into each of your accounts and reviewing recent transactions at least once or twice a week decreases your risk of identity theft and increases your chances of spotting bank or merchant errors. Regularly checking your balance also makes you less likely to overdraw.
Downsize when necessary
If you struggle to maintain minimum balances, accidentally overdraw more than once, or feel like you’re spending too much time logging in and out of apps, you might want to cut one account or more out of your banking suite.
Keep in mind that there are also middle-ground solutions out there. For instance, some account issuers, like Ally Bank, allow you to open one savings account and compartmentalize its funds into different “buckets.” This gives you budgeting flexibility without forcing you to open an unwieldy number of accounts.
FAQs
How many bank accounts can you have?
According to the Consumer Financial Protection Bureau, U.S. consumers can have an unlimited number of bank accounts.
How many bank accounts should a business have?
Each business should have at least one dedicated bank account for receiving payments, managing payroll, and covering bills. Some business owners may elect to maintain additional business bank accounts, such as an account for tax funds and an account for saving and growing profit.
Does having too many bank accounts affect your credit score?
Checking and savings accounts generally won’t affect your credit score, no matter how many of them you have. However, if overdrafts or fees result in a negative bank account balance and you don’t correct that negative balance for 30 days or more, your account may be reported to credit agencies. This will negatively affect your credit score.
Do I need to have a brick-and-mortar bank?
Access to brick-and-mortar banking is a must in certain circumstances, like if a substantial portion of your income is paid in cash or you need a safe deposit box to store particularly valuable items.
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