In the past, many people would sign up for a checking and savings account at their neighborhood bank without thinking twice. While that might have provided some convenience, it might not have been the best financial move. Today, consumers are looking for accounts that match their needs, even if that means opening accounts at different banks.
A recent GoBankingRates Best Banks 2023 survey found that 56% of Americans have accounts at more than one bank. Here are the five biggest reasons you should consider having accounts at multiple banks.
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You Can Leverage Different Features and Perks
Not all banks offer customers the same account features. For example, one bank might offer the value proposition of accessing your paycheck two days early with direct deposit, while another might pride itself on having a high-interest savings account. Understanding what features mean the most to you and finding banks that fit your needs is important.
“Many people bank with a national bank, largely because they tend to have branches on every corner; however, they are historically bad at being customer-friendly in terms of fees and often slow at offering new features,” said Matt Bundrick, co-founder of BankBonus.com.
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“With the rise of fintechs, we’ve seen a slew of innovation, including no overdraft fees, early paycheck deposits, no account maintenance fees, user-friendly apps, atm fee reimbursements, and more–with national chains being at the tail end of adoption.”
If the bank where you have a checking account doesn’t have a savings account that meets your needs, you shouldn’t feel obligated. Use your checking account that provides value, but look for a bank that offers what you want from a savings account.
Multiple Bank Accounts Can Make Money Management Easier
Money management can be a time-consuming and stressful job. However, it’s something that everyone needs to do to keep their finances in order. Luckily, many large banks today offer budgeting tools to simplify your job. However, something many people don’t think about is that having multiple bank accounts can make money management easier as well.
“Having multiple bank accounts can offer significant advantages for managing your finances more effectively,” said Scott Neu AIF, a financial advisor at Reinke Gray Wealth Management. “One key reason is the ability to separate your money based on specific financial goals or needs. Maintaining separate accounts for daily expenses, savings, and emergency funds can help you stay organized and avoid overspending.”
Take Advantage of Available Bonuses
Many banks offer attractive cash bonuses to encourage people to sign up for an account. While these bonuses can be a great way to help you reach a financial goal you might have, they can also give you a chance to try out a new bank and see if the product and experience are better than your current bank.
However, before signing up for an account because they have a bonus, read the terms and conditions. Often, banks require you to make a minimum deposit or set up direct deposits totaling a certain amount. They might also require your account to stay active for a minimum number of days. Understanding these conditions will ensure you’re able to receive the bonus.
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You Have a Lot of Cash
“If you have a lot of uninvested cash sitting around you may benefit from having accounts at multiple banks for this reason alone,” said Bundrick. “That’s because the FDIC, the government agency that oversees the banking industry, insures deposits up to $250,000 per ownership category per institution.
“Sure, you can increase that amount at a single institution by having single and joint ownership accounts, trusts, etc, but another common way is to just open an account at another FDIC-insured institution.”
Increase the Number of Products Available
If you think about the number of banking products you have, there could be several. Most people have a checking and savings account, but you might also have a mortgage, car loan, student loan, and investment account. Just like some banks might be better than others for the perks they offer, they can also stand out because of their product lineup.
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“Think of banks like grocery stores,” said Bundrick. “One may be your favorite for produce, while a neighborhood market may be great for quick stops with better pricing on dairy and essentials, and you find the local butcher shop is best for your cuts of meat.”
He said, “Some institutions may be great for loan and mortgage rates and terms but only have a basic offering for checking and savings accounts. You may choose another for everyday banking needs due to their wide array of checking accounts that will accommodate you as your balances and needs change, but opt for an online bank for high yield savings and CDs.”
While many people used to have accounts at a single bank, that’s no longer true. Today, they’re looking for banks that meet all of their needs. That could mean a different bank for each banking product they use.
