Should you have more than one savings account?
When you want to securely store your money, you can choose to open one or more savings accounts at a financial institution. If you’re unsure how many accounts to open, it’s a good idea to keep the advantages and disadvantages of having multiple savings accounts in mind before making a decision.
Meeting Your Financial Goals
If you have clear financial goals that you want to meet, consider setting up an account for each goal. This can provide the motivation to save more. You may have different accounts dedicated to emergency situations, vacations, car payments, and other objectives. By having these different accounts, you can more easily check your progress toward each goal, according to Justin Pritchard, writer for The Balance. In addition, Pritchard says you can better budget for monthly and annual expenses when these have their own accounts.
As Pritchard also notes, you may feel more upset taking money out of a savings account that’s devoted to a goal you deeply care about, and this may stop you from buying unnecessary items. Meanwhile, if you are happy seeing your balance increase over time, you may have positive reinforcement to keep saving money for a specific account.
Keeping Track of Your Accounts
One major downfall of having multiple accounts is that it’s more difficult to stay aware of each account’s balance, according to Chang. Rebecca Lake, contributor to Forbes, also says that transferring money between different accounts and scheduling withdrawals may be confusing, even if you have a budgeting app.
To make managing multiple accounts a bit easier, Pritchard advises receiving direct deposits of your paycheck and asking your employer to send your earnings evenly to multiple accounts. However, Pritchard says your employer may not be able to pay you this way, and you may still need to schedule transfers from your checking account to your savings accounts.
Manage All Your Accounts in Digital Banking
Five Star Bank’s Digital Banking tool is a simple way to connect all of your accounts. Link accounts from other financial institutions to see your full financial picture – spending habits, cash flow trends, total debt and more – from the main dashboard. You can also add external accounts to transfer funds across all your accounts, making it convenient to manage your money in one place.
Learn more about Digital Banking and download the app today to get started.
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