One Bank or Many: Where Should I Keep My Accounts?
What’s your banking strategy: One bank, many accounts—or do you like to, literally, spread the wealth?
Believe it or not, how you bank not only helps you organize your funds, but if done right, it can also make you money. Which is why we spoke to LearnVest certified financial planner™ Elizabeth Sklaver to help you decide on the best scenario for you.
The One-Bank Advantage
Maybe you got that first checking account that came free with your first job and never looked back. Maybe every account you’ve opened since has been at My First Bank. If that describes you, we get it: There’s one advantage to keeping your checking and savings accounts in the same bank … simplicity.
With everything in the same place, you only have to visit one bank—or make transfers between accounts at one bank—and remember one set of login information. (And who hasn’t wasted precious moments of their lives trying to remember their passwords?)
But as your financial life changes, the one-size-fits-all approach may no longer suit you. In fact, depending on your money needs, there are also a few good reasons you may want to open accounts at more than one bank—and a variety of factors that go into choosing the right one for you.
Why Multiple Banks Might Be Better: 4 Questions to Ask Yourself
1. Are You Likely to ‘Borrow From Yourself’?
Keeping your checking and savings at separate institutions takes advantage of the idea, “Out of sight, out of mind.” In other words, if your hard-earned savings isn’t linked directly to your checking account, and it takes 24 to 48 hours to free up funds, you might think twice about spending that money.
And, keeping both accounts in the same place can lead to some funky mental math: If you’re just taking a minute to check the balance on your checking account, but see all of the money in your savings as well, you’re more likely to feel like you have all of those funds available to spend, says Sklaver.
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But what if you like the way having one bank keeps you organized? If the idea of checking in with accounts on multiple sites sounds like a little too much work, you can always monitor all of your accounts in the free LearnVest Money Center, where you can check the balances without the temptation to spend.