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6 Reasons Why You Should Own Multiple Savings Accounts

Putting your money in multiple savings accounts can help you manage different savings goals while maximizing the yield on your money. Here’s how.

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The age-old adage, “don’t put all of your eggs in one basket,” cautions us against putting all our resources into a single, risky endeavor. This well-established proverb can easily apply to savings accounts -- a risk-averse way to put money aside for a rainy day.

Savings accounts -- be they certificates of deposit, or CDs, money market or high-yield savings accounts -- are low-risk deposit accounts you can use to grow your money for various financial goals, such as building an emergency fund, paying down student loans or saving for a down payment.  

“I think it is certainly OK to have multiple savings accounts. But just like anything else, don’t set it and forget it,” said Marguerita Cheng, a certified financial planner and chief executive officer at Blue Ocean Global Wealth. “But I can honestly say it depends on your situation and what services you need.”

Banks use money held in deposit accounts to fund their lending operations. In exchange for the right to invest your money and turn a profit, a bank or a credit union will pay you interest on the balances it collects. Savings accounts at federally insured financial institutions, for example, are insured against loss by the Federal Deposit Insurance Corporation at banks and the National Credit Union Administration for accounts in credit unions for up to $250,000 per person, per institution.

But if you’re like half of Americans polled in a 2018 GoBankingRates survey who said they’re loyal to only one bank and keep their reserves in one place, then you’re overlooking six practical reasons to have more than one savings account.

1. Reduce the chances of overspending

It can be hard to save when you’re constantly reminded of the balance in your savings account. If you have a savings account at the same bank as your checking account, you might see your balance every time you log onto your online account or open your bank’s mobile app. What’s more, you might even have a transfer button that’s far too accessible. 

The out-of-sight-out-of-mind principle is handy when savings accounts aren’t connected to your main banking account. You’re less likely to consider accounts for daily expenses or impulse purchases if you’re not constantly reminded that the savings balance exists. Combine this with an automatic deposit or transfer, and your balance can grow unscathed. Maintaining separate savings accounts at different banks or credit unions can leverage the set-it-and-forget-it approach. 

2. Automate savings growth

You can schedule automatic recurring transfers from your checking to savings account. You can even ask your employer to directly deposit a portion of your paycheck into your savings account every time payday rolls around. Automating your savings makes it easier to part with a portion of your paycheck because you don’t have to make the conscious decision to press transfer. Consider your monthly budget and determine how much you can comfortably transfer each month to amplify your savings balance. 

3. Find the best yields

For the last 15 months, the Federal Reserve has hiked interest rates to offset inflation. But the Fed announced a much-anticipated pause on raising rates for the first time in over a year on June 14. The consistent rate hikes since March 2022 have been kind to savings accounts, with some of the best banks offering between 4.00% and 5.00% APY on savings and CD rates. 

Though the Fed took a step back in June and pressed pause on another rate increase, experts predict rates on high-yield savings accounts will continue to increase. Given that most banks and credit unions offer top-notch security, access and a variety of services, finding the account with the highest annual percentage yield, or APY, can help minimize the sting of inflation.

“There are benefits to having money in different financial institutions because you can increase the interest and yield on your savings,” said Cheng. “It’s mental accounting.”

For example, Cheng suggests keeping accounts such as a rainy day fund and the fund for estimated quarterly tax payments separate. This is particularly important if you aren’t paying fees to maintain the account. “It’s a terrible time if you’re borrowing money, but if you’re a saver, there are definite benefits to having your savings at more than one institution, especially now with interest rates higher,” she added. 

4. Track your progress

Using separate accounts to track your progress is a solid strategy for reaching your financial goals. You can use separate accounts to save for big-ticket items such as college savings, making down payments on a car or home, or taking a life-changing vacation. Separating savings accounts will clarify how close you are to a specific goal. The visual reminder can boost momentum and help you stay focused on your goal.

5. Keep your money insured

The federal government started backing banks as a part of the New Deal under President Franklin Roosevelt as a policy to address bank failures during the Great Depression of the 1930s. Deposit accounts are covered at FDIC-insured banks and NCUA-insured credit unions up to $250,000 per person, per institution. 

“If you have more than $250,000 in one account, that’s where it might make sense to establish a secondary banking relationship,” said Cheng. “It’s one thing to lose money in the stock market because if you believe in the long-term viability of the markets, it will come back. It’s another thing to put $400,000 somewhere in cash and then one day not be able to access your money because of a bank failure. Cash is supposed to be safe. And I want people to be safe.”

When deposit account balances approach $250,000, opening a new savings account at a separate bank isn’t only wise but essential to ensure that your money will be covered against bank losses or failures. While the banking industry is relatively stable, three US bank failures have occurred this year. 

6. Take advantage of bonuses

Bank account bonuses are a useful incentive to open a new savings account. These bonuses can range from a few hundred dollars to $500. The bonuses come with conditions ranging from direct deposit minimums required to maintaining a monthly balance over several months.

Steps to take when setting up multiple savings accounts

  • Identify why you need multiple savings accounts. This will determine the number of accounts you need and how you want the accounts to interact with each other. For example, if you’re saving for a new car because you want to pay cash, but you’re also saving for an international vacation, separate accounts will help you stay on top of your savings progress for both plans. 
  • Find the best APYs. The best high-yield savings account offers rates exceeding 4% right now. Compare offers across different banks to find the best rate and account benefits for your savings goals. 
  • Know what fees or penalties are associated with the account. Research the top high-yield savings accounts and compare several features in addition to APY, such as monthly fees, minimum balance requirements and ATM access. Also, look out for limitations on the number of transactions permitted each month and how much money is required to open the account initially. 
  • Decide how you want to access your money. Do you need a physical bank with customer service to access your funds in person, or do you prefer an online-only bank where you can manage your funds from the comfort of your home? If the bank has physical branches, would having convenient access to services tempt you to tap your account? You should also decide how you want your bank accounts linked. The ability to deposit funds at regular, automatic intervals is key to building a healthy savings habit.
  • Schedule time to review your accounts regularly. Add a calendar reminder at least once a month to review your savings goals and multiple account balances.

When should you avoid opening multiple accounts?

Having multiple accounts can be a great strategy to build and protect your savings, but there are situations when opening an additional savings account isn’t advisable, including the following.

  • The new account charges service fees. Fees can eat away at your earnings and add up significantly over time. If you can, it’s best to avoid savings accounts with various fees. For example, you can dodge ATM fees by finding a bank that offers rebates on ATM fees charged by out-of-network vendors. 
  • You can’t deposit enough to waive monthly service fees. You might need to fund your savings account with a minimum deposit to avoid monthly service fees. Depending on the bank, minimum deposit requirements can vary from zero to more than $1,000. To build your savings responsibly, you should choose an account that doesn’t set a minimum balance requirement exceeding the funds you have ready to set aside.  
  • You don’t want to pay taxes on the interest earned. You must report any interest you earn on a savings account to the IRS unless the account is tax-exempt or tax-deferred, such as an IRA, Roth IRA, 401(k) or 529.  
  • You can’t satisfy the requirements that make opening a new account feasible. These requirements may include a minimum monthly direct deposit amount.

The bottom line

Savvy savers use the strategy of opening multiple savings accounts to help them focus and reach their financial goals. Using multiple savings accounts at different banks or credit unions provides a structure that can help you avoid impulse buys and overspending while setting your savings process on autopilot.


That, of course, depends on your personal financial goals. There’s no one correct answer. Aligning the number of accounts with significant savings goals is one approach. If you find that adding or removing accounts will simplify your life and make tracking your progress more manageable, then adjust accordingly.

Additionally, ensuring that your balances in one bank don’t exceed the federal insurance limits offered by the FDIC or NCUA can help you determine the number of savings accounts that make sense for you and your money.

While some banks may limit the number of accounts you can open internally, there’s no limit to the number of savings accounts one person can have. Opening savings accounts at multiple banks or credit unions will nullify any limits a single bank imposes. What’s more, there’s no impact on your credit score for having multiple accounts.

Yes, if:

  • Your account balance at any one bank will exceed $250,000.
  • You find a better APY offer than your current bank without additional fees that cut into your overall returns.
  • You want to employ strategies that track savings goals with individual accounts and one bank limits the number of accounts per individual.
Toni Husbands is a staff writer with CNET Money who enjoys exploring topics that promote financial wellness. She began writing about personal finance to document her experience paying off $107,000 of debt, which is detailed in her book, The Great Debt Dump. Previously, she contributed as a freelance writer for websites, including, Centsai and Wisebread. She was also a regular contributor to Business AM TV, and her work has been featured on Yahoo News. Being a part-time real estate investor and amateur gardener also brings her joy.
Liliana Hall is a writer for CNET Money covering banking, credit cards and mortgages. Previously, she wrote about personal credit for Bankrate and She is passionate about providing accessible content to enhance financial literacy. She graduated from the University of Texas at Austin with a bachelor's degree in journalism, and has worked in the newsrooms of KUT and the Austin Chronicle. When not working, she is probably paddle boarding, hopping on a flight or reading for her book club.
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