Can I have 2 regular savings accounts?
"There is no right or wrong number of savings accounts," says Kendall Meade, a certified financial planner at personal finance platform SoFi. "Some people prefer to separate their savings into multiple accounts for different purposes, while others find it simpler to have all of their money in one account."
There's no limit to the number of savings accounts you can have, but the key is to make sure you can manage them all. Learn why you may want to have as many savings accounts as you have savings goals, and what to consider when shopping for a savings account.
You may open as many savings accounts as you want. Savings accounts are tools for growing your money, so you can keep things simple and maintain one account or open multiple savings accounts.
Savings accounts are a great way to plan for multiple short-term goals. Since there are minimal balance and withdrawal requirements compared to other deposit accounts, you can open as many as you need to efficiently manage your budget and goals.
Having multiple savings accounts could help you keep your money covered by FDIC insurance, keep your emergency fund safe from spending, and help you better track your goals.
Which bank gives 7% interest on a savings account? There are not any banks offering 7% interest on a savings account right now. However, two financial institutions are paying at least 7% APY on checking accounts: Landmark Credit Union Premium Checking Account, and OnPath Rewards High-Yield Checking.
Having multiple accounts also adds barriers to spending your money, especially if those accounts are at separate banks. Before you can spend the money, you'll need to transfer it to a checking account, and that transfer may take a few days to complete if done between separate banks.
Having multiple savings accounts could be a smart move if you have very targeted financial goals. It makes it easier to keep those goals separate and prioritize how much and how often you save toward them.
No, it is not illegal or bad per se to have multiple bank accounts. The only important consideration is: What is your motivation for opening different accounts?
FDIC and NCUA insurance limits
So, regardless of any other factors, you generally shouldn't keep more than $250,000 in any insured deposit account. After all, if you have money in the account that's over this limit, it's typically uninsured.
How much money should you keep in a savings account?
For savings, aim to keep three to six months' worth of expenses in a high-yield savings account, but note that any amount can be beneficial in a financial emergency. For checking, an ideal amount is generally one to two months' worth of living expenses plus a 30% buffer.
- 1) State Bank of India (SBI) Savings Account.
- 2) HDFC Bank Savings Account.
- 3) Kotak Mahindra Bank Savings Account.
- 4) DCB Bank Savings Account.
- 5) RBL Bank Savings Account.
- 6) IndusInd Bank Savings Account.
- 7) ICICI Savings Bank Account.
- 8) Axis Bank Savings Account.
When closing a bank account, a common question people ask is whether it will negatively impact their credit scores. Fortunately, closing a savings or checking account that's in good standing won't hurt your credit in any way.
Opening a bank account won't impact your credit score, and neither will the amount of money you have in your account. It's not as if having a higher balance will result in a boosted score while having less money will cause your score to shrink.
Using multiple savings accounts can be less of a bonus and more of a costly burden if you're hit with monthly maintenance fees. If a savings account has monthly surcharges, look for ways to get them waived. That might include keeping balances above a certain dollar amount or scheduling automatic transfers to savings.
The IRS treats interest earned on a savings account as earned income, meaning it can be taxed. So, if you received $125 in interest on a high-yield savings account in 2023, you're required to pay taxes on that interest when you file your federal tax return for the 2023 tax year.
A CD may allow you to earn more interest compared to a traditional savings account, depending on where you decide to open one. As long as you don't need the money in a CD before it matures, you could earn a decent amount of interest this way, especially when rates are climbing.
| Provider | Rate (AER) |
|---|---|
| Co-operative Bank | 7% variable for one year |
| Skipton BS (must have been a member since before 11 Jan 2024) | 7% fixed for one year |
| Nationwide | 6.5% variable for one year |
| Lloyds Bank (need a Club Lloyds account) | 6.25% fixed for one year |
The ideal number of bank accounts depends on your financial habits and needs. You might be happy with just two accounts – checking and savings – or you may want multiple accounts to separate business and personal expenses, share a bank account with a partner or maintain separate accounts for various financial goals.
As long as that bank is FDIC-insured and your deposit doesn't exceed $250,000, you should be safe to do so. It might be worth it to maintain an account at a separate bank, however, just in case a bank error or accidental account freeze results in a loss of access to your money for a time.
Why shouldn't you put all your savings in one place?
If you have all of your assets at a single bank, that puts you at risk of being in a tough financial situation. While accredited banks have FDIC insurance to protect your deposit accounts, it can take days or even longer to receive that deposit insurance payout.
The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals. Let's take a closer look at each category.
You can have more of your money covered by federal insurance. By spreading your accounts around to different federally insured banks and credit unions, you can get access to having more of your money insured by the NCUA or the FDIC. You can better manage your money and build your savings.
Banks generally cannot see your other bank accounts without your permission. However, there are some situations where banks may have access to your financial information.
Opening accounts at multiple banks is fine, especially if you like a specific account elsewhere or the bank doesn't offer everything you need. Remember that each bank you use means another account login to remember and another banking app to download and use.
