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Having a checking account is an important part of managing your finances. It makes it easier to pay bills, make purchases and track your spending. You can certainly have multiple checking accounts if needed. In some instances, it might help keep your spending in check and make for simpler budgeting—but there are potential downsides to consider. Here's what you need to know about having more than one checking account.
Can You Have Multiple Checking Accounts at the Same Bank?
Yes, you can have multiple checking accounts at the same bank. If you opt for more than one checking account, having them at the same bank can help simplify your finances. You can likely link your accounts and see everything in one place when you log in online. That can allow you to easily transfer funds and keep track of your income and expenses. Below are some reasons you might choose to open a second checking account with your current bank:
- You're opening a bank account for your child. Some kids' checking accounts require parents to also have an account with the same financial institution. If you're looking to open an account for your child, it might make sense to do it at your current bank or credit union.
- You and your partner want separate checking accounts. Joint checking accounts aren't for everyone. You and your partner might choose to keep separate accounts for individual spending. Doing so at your current bank can simplify the process, especially if you've been a longtime customer.
- You want to continue benefiting from perks at your bank. If your current bank has minimal fees, good customer service and no minimum balance requirements, you may have no reason to go to a new bank—especially if those benefits will extend to a second checking account.
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Can You Have Multiple Checking Accounts at Two Different Banks?
Yes, you can have multiple checking accounts at different banks. There's no reason why you can't open a second checking account with another bank, especially if it leads to fewer fees and a better banking experience. Managing an external account might require a little more work on your end, but some budgeting apps can link your accounts for you. Here are a few reasons why you might open another checking account at a different bank:
- You want extra financial protection. Checking accounts at banks are insured by the Federal Deposit Insurance Corp. (FDIC) for up to $250,000, per depositor, per insured bank for each account category. (Credit unions offer similar insurance coverage.) If you have more than that, splitting your funds between two different banks can offer more protection.
- You don't like your current bank's offerings. If new checking accounts at your current bank come with fees, minimum balance requirements or limited ATM access, you might consider switching to a different financial institution.
- You find an attractive promotion at a different bank. Some banks offer cash bonuses and other incentives to new checking account holders. That could be enough to make the switch.
Pros and Cons of Multiple Checking Accounts
Having multiple checking accounts comes with both benefits and drawbacks.
Pros
- Multiple accounts can keep your funds separate and help prevent overspending.
- It can mitigate financial risk by increasing your FDIC or National Credit Union Administration (NCUA) insurance.
- Multiple checking accounts can give you and your family members more financial independence.
- You might take advantage of sign-up bonuses, lower fees and better service from another bank.
Cons
- If you open a second checking account at a different bank, you'll have to keep track of two external accounts.
- Having multiple checking accounts could complicate your budget if you aren't organized.
- If you're enrolled in autopay, you may have to contact different service providers to update your account information. The same may apply if you receive your paychecks via direct deposit.
Alternatives to Multiple Checking Accounts
You may decide that multiple checking accounts aren't for you. Here are some alternatives that might make better sense.
- High-yield savings account: This type of account earns above-average interest. You can fund a high-yield savings account through automatic transfers from your checking account. Liquidity generally isn't an issue, but your financial institution may limit how many free electronic transfers and withdrawals you can make per month.
- Money market account: A money market account is a cross between a checking account and a savings account. You'll likely have a debit card and ATM access, but like a high-yield savings account, free electronic withdrawals and transfers may be limited.
- Apps and accounts that let you divide your funds: With certain budgeting apps, you can assign a purpose for every dollar in your checking account. Some banks also allow you to create separate savings accounts for different financial goals.
The Bottom Line
There's no rule against opening a second bank account. You might stick with your current bank or credit union, or branch out to a new financial institution. Either way, having multiple checking accounts could make budgeting easier—or more challenging, depending on how you manage your finances. The right option for you will depend on your spending personality.
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