Many people start out their professional life with a single bank account. This is often connected to the company they work with and functions as their payroll account. Keeping all your funds in a single bank account is a good way to keep track of your money, especially if you’re just starting to explore your options as a self-supporting and financially-responsible individual. Over time, though, you’ll need to adapt the way you structure and manage your finances to the changes in your personal and professional life. Often, this means considering opening new bank accounts.
Now, some people like the simplicity brought about by having only 1 bank account. If you’re keeping all your money in a single place, after all, you don’t need to look elsewhere to get a good view of the current state of your finances. In such instances, having a single bank account is perfectly fine. At the same time, there are also those who see managing multiple bank accounts as a reasonable means to achieve their financial goals. If your current situation is similar to one or more of the following, then managing a few more bank accounts is a practical decision. Read on to learn more about the situations where this may be the case.
You Want to Separate Your Savings from Your Expenses
Saving money can be a big challenge if you only have 1 bank account under your name. You may find it difficult to set aside an emergency fund if you can clearly see that your bank account still has a bit of money left in it at the end of the month. Opening a dedicated savings account in the same or in another bank can help you create clear distinctions between the portion of your money that is meant for spending and the amount that you should be saving for a particular goal or for emergencies.
You Want to Save for Multiple Big-Ticket Items and Goals
Perhaps you’re planning to save for a big expense, such as the down payment for a home or a car. Depending on your financial state, you may need to save up for these expenses for a few months or even a year or so. At the same time, you want to keep building an emergency fund for times of need. In this case, it makes sense to open multiple accounts for multiple purposes. If you’re opening multiple accounts under 1 bank, you can even arrange specified portions of your monthly income to be automatically distributed to these different savings accounts every month.
You Want to Check Out the Services Offered by Different Banks
Opening multiple bank accounts can also be done in the name of research. If you’re not sure where you should keep most of your money, you can open bank accounts in different banks to get a feel of the services they offer. This will allow you to see which banks have services and products that suit your lifestyle and financial goals. Once you’re done with your research, you can settle on a bank or even maintain all your accounts to enjoy different perks.
You Want to Secure Your Finances In Case Your Main Bank Fails
Putting all your eggs in one basket seems like a pretty risky move. As such, opening multiple accounts offers you peace of mind that you can still have access to a portion of your money in case one of your banks is unable to meet its obligations to its depositors. On a much smaller scale, you may want to have alternative banks in case your regular bank is prone to experiencing technical issues, like a non-responsive app or an offline ATM.
You Want to Improve your Chances of Getting a Loan Approval
Of course, many banks these days accept statements from other banks as proof of a lender’s capacity to pay for the loan. However, building a professional relationship with a bank can still improve your chances of loan approval in the future. If you’re planning on taking out a loan in one of the banks you regularly use, then you won’t have to go through a lot of hoops just to provide a bit of background on your finances.
Before opening a new bank account in another bank, take note that managing multiple bank accounts takes a lot of work. It’s a good idea to start slow if you’re not used to distributing your money and ensuring that all your accounts have the minimum balance required by their respective banks, or if juggling multiple bank accounts confuses you and makes it difficult for you to track your savings and expenses. With a little bit of practice and organization, though, it’s highly likely that you’ll get used to the process. In time, you’ll be able to maximize all the possibilities of having several bank accounts without stressing too much.