Having numerous bank accounts does not equal more money, nor does it make you richer than someone with one or two bank accounts. If you want to have more than one bank account, there must be a reason for it.
You have to weigh the reasons behind having more than one bank account before going on with it. As such, you have to ask yourself, How many bank accounts should I have in 2024?
This is one question that you have to ask at one point or another. This may not look like something you should give a second thought to. But hear this: it can actually make a difference in your bank account balance.
There are some factors you have to consider when deciding on how many bank accounts you are to open as well as what kind they should be. You will have to weigh the different bank account options as well as how well you will benefit from them.
Having more than one bank account has some advantages. However, you must first do your research and find out the best bank that will suit your needs before you make any decision.
At the end of the day, it all boils down to personal preference. While some people think it’s best to have two bank accounts for saving and spending, others don’t mind having one or multiple, as the case may be.
How Many Bank Accounts Should I Have in 2024?
Before you go ahead and open more than one bank account, you have to align your bank accounts with your goals. For instance, if you are someone like me who does a lot of impulse buying, you can open a bank account that will help you save for a rainy day. At the same time, have an account that you can spend from. This will help you have a separate account that you can use for your savings and one that you can use for your spending.
Do you need a bank account that will help save for retirement or college tuition in the future? Then, you can weigh the options available and find the one that best fits your needs.
When you’re looking into this type of bank account, you’ve got to consider features like
- There are no fees on ATM withdrawals within its network, which can be very expensive.
- Low-rate loans and mortgages
- High interest rates on savings balances, etc.
By carrying out this research, you may end up saving some money at the end of the day.
These types of accounts make managing your money quite easy. They also offer you convenience as well as a simple and seamless fund allocation from one bank to another.
With just a few clicks, you will be able to transfer money easily between accounts. This is because the banks already have your information, which makes the process quite easy. This comes in handy, especially when balancing your checking account. This is because withdrawals from this type of account are free but not always available at every branch.
So the question of how many bank accounts you should have depends on what specific needs you may have in the future. If you are just starting out, it will be best to start with one bank account (checking), which can cover your day-to-day expenses.
Then you can work your way up to two or three different types of bank accounts as you set your plans for retirement, tuition, college, etc.
Types of bank accounts you should have
Checking Account
A checking account is one of the basic accounts that you should have. You can use it for your day-to-day expenses like groceries, gas, and other living needs. A checking account offers you the fastest and most convenient means of accessing your money. With a checking account, you can make as many transactions as you need within a given month.
But your savings account might have limits. A variety of checking account options are being offered. They include minimum balance requirements, monthly service fees, and the number of checks you use each month. These are some of the features you will find at banks for checking accounts.
Savings Account
Savings accounts come in different shapes and forms. It can be in the form of a bank account, a savings bond, or even an investment. The perk with this bank account is that it has some kind of interest rate return.
The idea behind a savings account is to save money and watch your balance grow over time. However, most people use these as emergency funds when unexpected expenses crop up. There are also different types, like certificates of deposit (CDs), which you make deposits into over a given period, usually six months, one year, or two years.
This is in order to get higher rates on your returns. However, if you need access to the cash before the term ends, But there may be penalties assessed by taxing authorities. Thus, you have to read the terms and conditions beforehand.
Explore Different Types of Retirement Investment Accounts
Retirement investment accounts come in all shapes and sizes. Retirement investment accounts include traditional bank accounts, IRAs, and Roth IRAs, retirement investment accounts.
The advantage that comes with the nondeductible account is that it offers a tax-deferred status.
This means that your earnings will not be taxed until you withdraw them during retirement. Taxing authorities may assess penalties if you need to access the cash before the term ends. As such, you have to read the terms and conditions beforehand.
The most common type of deductible account is a 401K or 403b plan. Why? Because they give you room for contributions straight out of your paycheck with no taxes deducted now. Even at that, these funds can only be invested in certain types of stocks, bonds, and mutual funds approved by federal law.
Non-retirement investment account
After building your retirement account, the bank can offer various other account types. This will help you meet your needs, including money market accounts, checking and savings accounts, certificates of deposit (CDs), annuities, and individual retirement accounts (IRAs). Each of these account types has its own advantages and disadvantages, depending on your goals.
College Savings (529b)/Custodial Accounts
If you have children, you’ll need a custodial account. This is a bank account for the child. It is an option you can consider if your children are under the age of 18 and are not married or have children themselves.
The bank, on its end, can offer 529b plans (a college savings plan). These work by investing your contributions in stocks, bonds, mutual funds, and other investment vehicles with tax benefits. This helps to cover higher education expenses.
Also, you can set up a custodial account as part of your estate planning process. When death calls, it will receive anything left over instead of going through probate court.
Having bank accounts at different banks
This totally depends on the bank you are with.
It also depends on the bank you prefer. You can choose any bank that offers better value for your money. Before you commit yourself contractually to a new bank, you have to ensure that its benefits outweigh any limitations it has.
Conclusion
At the end of the day, it is what works best for you that you should go for. Having more than one bank account can help you save money on interest rates, avoid fees for insufficient funds and overdrafts, and even add a little extra cash to your budget. However, you have to manage these accounts responsibly in order to get the desired benefits from your additional financial institution.