Have you ever heard of the concept of putting all your eggs in one basket?
That’s what most people do when it comes to their bank account.
They go have one bank account, they put all their eggs in one basket but really you should have multiple bank accounts and there’s a lot of reasons to it.
In fact some people may need to have three to five bank accounts, it makes much more sense.
The first big reason is that each account has different benefits.
There’s a lot of different bank accounts out there like savings account, a business account or a money market account they all have different benefits.
So if for example you have a savings account that savings account usually makes a little bit more income or interest than a checking account.
Or if you’ve got a business account to help separate the finances.
But the one big reason is that each account has different benefits.
So in that case it’s nice to have multiple accounts and by multiple accounts I’m also talking about multiple accounts at different branches.
Reason number two – Additional Layer of Protection
Reason number two and here’s kind of a big benefit that most people don’t think about and that is an additional layer of protection.
Let’s say if your bank account gets compromised a second bank account can be useful especially at another branch.
Let’s say all of a sudden you’ve got some identity theft but they’re aware of your one bank account or they’re creating more bank accounts but they’re aware of that one well they might be able to extract that one but at least you have another bank account.
Or let’s say that one bank account got compromised so now all of your payments and everything that’s tied into that gets locked up.
You got to do a lot of work but imagine you had a second bank account where half of your life was on another bank account at another branch at a whole different banking institution.
That’s one of the cool things behind adding that additional layer of protection is that if one gets compromised, there’s an issue, it’s just basically nice to have another branch or another bank.
Not only to mention you also build a relationship with another bank.
Third reason is the psychological reason.
So splitting bank accounts can help you save for a bigger purchase.
They can also split investments or compartmentalize your money.
Let’s say you’re trying to save for a wedding; your bank account number one is your primary bank account and bank account number two is kind of your secondary wedding fund.
Well all of a sudden having that split up you just slowly moving money over there it helps kind of save for the purchases.
You could have it at the same institution or you could have it at a different institution, it just allows you to kind of mentally and psychologically split things up and that’s one of the good things about having a second or third bank account.
It just separates things just like having an extra business account.
However, there are some big issues with having additional bank accounts.
When it comes to having multiple bank accounts you do have more accounts to manage.
There might also be minimum balances and each one might have a few thousand dollars of minimum balances which means you might be using or having money in there that you don’t necessarily need or want to use.
You might want to put them into investments but you want to keep the minimum balance so that way the fees are lower.
The minimum balances, more accounts to manage are just minimal compared to kind of the additional benefits that you get.
