How Many Bank Accounts Should I Have?

How Many Bank Accounts Should I Have?

How Many Bank Accounts Should I Have?

I created the “3B Banking Method” which means you should have three bank accounts. Simple and easy enough to remember 🙂

Three bank accounts are all it takes to manage your finances successfully.

With that said, sometimes you’ll need to have more than three bank accounts but we’ll talk about when you would later on.

First, why do you need one checking account and two high-yield savings accounts? 

One Checking Account

Your one checking account will be used to deposit your paycheck, pay your monthly bills and make everyday purchases.

Bills include your mortgage/rent, utilities, cell phone, car insurance, etc. It’s an expense that’s paid each month.

Everyday purchases include your groceries, personal care items, household items, coffee, etc.

As you can tell, multiple withdrawals will be made from your checking account each month which is perfect because a checking account does not limit how many withdrawals you can make.

Some accounts, like high-yield savings accounts, do have withdrawal limits but we’ll talk about why that shouldn’t be a problem later on.

Two High-Yield Savings Accounts

A high-yield savings account pays interest. This means you’ll get paid a little bit of money for keeping your money in the account.

Traditional savings accounts don’t pay interest and if they do it’s a ridiculously low amount. When choosing yield-savings accounts, look at APY (Annual Percentage Yield) versus interest. The higher the APY the better.

Your two high-yield savings accounts will be used to keep two very important saving goals.

Your first high-yield savings account will be used to keep your emergency fund money.

I recommend keeping an entirely separate bank account for an emergency fund for two main reasons.

One, you’ll always be 100% clear on the balance, and two, you won’t “accidentally” dip into your emergency fund to purchase your last-minute vacation for example.

Your emergency fund is really important and you want to make sure you’re always 100% clear on the balance and/or how much money you need to fund it.

How much money do you need in your emergency fund? Most financial experts recommend keeping 3-6 months worth of living expenses in your emergency fund.

If you live in a two-income household, three months should be sufficient. If you’re single or live in a one-income household, six months should be sufficient.

How do you calculate living expenses?

Total your fixed (mortgage/rent, car insurance, cell phone, transportation, utilities, etc.) and variable (groceries, clothes, household items, etc.) monthly expenses. Multiply that by either three or six and you have your emergency fund amount!

When would you take money out of your emergency fund?

If you were to lose your job, have an unexpected home, car, or medical expense.

Final Thoughts On How Many Bank Accounts Should I Have?

When would you need more than one checking account or two high-yield savings accounts?

Multiple checking accounts is probably a good idea when you own a business, are married, or plan on keeping more than $250,000 at any one bank.

When you own a business or are self-employed, it’s best to keep your business expenses and deposits separate from your personal checking account. You don’t need to have a separate checking account for your business but when it comes to taxes, it makes things a lot easier.

If you’re married, it might make sense to keep a joint account where you and your spouse are the owners and one checking account just for yourself and your expenses.

If you plan on keeping more than $250,000 at any one bank, it’s best to have accounts at multiple banks because the FDIC only covers $250,000 if for whatever reason your bank closes.

The FDIC Federal Deposit Insurance Corporation is a government agency that guarantees up to $250,000 per individual, per bank, and $500,000 for a joint account.

So if you have $275,000 in one checking account (or even two checking accounts) at the same bank, only $250,000 will be covered if the bank closes.

Lastly, your checking account will also be used to transfer to your retirement and/or brokerage account.

Alright, so you have one checking account and two high-yield savings accounts. Should all your money be kept in your bank accounts?

Nope! You should not keep all of your money in your bank accounts.

Although high-yield savings accounts pay interest, it’s literally nothing compared to how much more you can grow your money by investing it in a retirement and/or brokerage account.

You should be contributing monthly to your retirement (IRA, 401(k), 403(b), etc.) and/or brokerage account. How much you contribute depends on your financial situation however make it a priority to always contribute to both or one of these accounts.

How Many Bank Accounts Can I Have?

Can you have two bank accounts? Absolutely. Can you have two checking accounts at the same bank? Absolutely.

You can have as many bank accounts as you want but I recommend you don’t. Why?

Because too many bank accounts can make money management confusing, difficult, time-consuming, and expensive.

Keep it simple and start with the three bank accounts I’ve recommended.

After you’ve successfully learned how to manage three bank accounts, it might be a good idea to open another account or switch banks entirely to take advantage of new account bonus offers.

However, don’t get caught up in the new account bonus offers. Don’t open a new bank account just to get the introductory offer and then forget about it.

Many banks require that you have a minimum balance or that you deposit monthly to the account and if you don’t, you’ll have to pay a monthly service fee.

Wouldn’t it get confusing if you had three checking accounts and three high-yield savings accounts? Yes, and it is not necessary!

Why You Should Have Multiple Bank Accounts

1. Helps Organize Finances.

Keeping all of your money in one bank account is like keeping all of your clothes in one drawer.

Try organizing your shirts, pants, socks, sweaters, intimates in one drawer and see how quick it is to get ready in the morning?


You should have multiple bank accounts because it helps keep your money organized.

As I have mentioned, you only need one checking account and two high-yield savings accounts to manage your finances successfully.

In some instances, you might need two checking accounts which I’ve discussed when you would but for the most part, three bank accounts will do the job.

Each account (one checking and two high-yield savings accounts) serves a unique purpose so it’s important to have all three.

When it comes to having your bank accounts at different banks, sometimes you have to. For example, you have a checking account at Chase and want to keep it there but find that a different bank offers a better APY (Annual Percentage Yield) on high-yield savings accounts.

In this case, you would have bank accounts at different banks and that’s okay.

2. Helps Achieve Savings Goals.

Separating your savings from your checking account is crucial.

Keeping your emergency fund money in one bank account will ensure that you’re always 100% clear on the account balance.

Let’s say your emergency fund should have $12,000 and your balance is $10,000. How much more clear can it be that you only need $2,000 to 100% fund it?

Pretty clear right?

Keeping a separate bank account for other saving goals is also a great way to see how much you’ve actually saved up and how much you have left to go.

If you had one savings account where you kept your emergency fund and other savings money, you would get confused and it would be easier to spend your emergency fund money on things other than an emergency!

3. Helps Protect Money.

If you have more than $250,000 in one bank (which includes the sum of any checking/saving accounts you have at that bank), make sure you open an account with a different FDIC-insured bank because remember, only $250,000 per person, per bank, is insured.

If you have a joint account, up to $500,000 is insured. If your joint account balance is $650,000, only $500,000 will be insured by the FDIC.

Regardless of the amount of money you have in your bank account, always open bank accounts in FDIC-insured banks.

How Many Bank Accounts Should I Have Summary

In summary, my recommendation is that you should have three bank accounts. You should have one checking account and two-hield yield savings accounts.

Your checking account is where your paycheck is deposited and where your monthly and daily expenses are debited from.

Your two high-yield savings accounts are for your emergency fund and short-term savings goals.

I hope this has helped answer your how many bank accounts should I have question!

Lastly, don’t forget that you should not keep all of your money in your three bank accounts.

Investing your money in a retirement plan (IRA, 401(k), 403(b), etc.), brokerage account, or any other investment will be more profitable in the long run rather than keeping your money in cash.

Back to list

Leave a Reply

Your email address will not be published. Required fields are marked *