Virtually every financial decision you make in your adult life will involve having some sort of bank account to either deposit or withdraw funds from. Whether it’s applying for an apartment or receiving a paycheck from an employer, a bank account is often the easiest way to facilitate these transactions. 

So you may ask yourself, “how many bank accounts should I have?” Well, the quick answer is that, like most things, it depends on the situation and the individual in question.

The most straightforward recommendation is to have at least one checking account. Checking accounts are your principal repository of money entering and leaving your account. Pretty much all financial tasks in life can be done with a checking account alone. 

But it’s also highly recommended to own a savings account alongside a checking account. So, with that said, the best recommendation is to have at least two bank accounts: checking and savings.

A surprisingly large number of adults do not have an emergency fund saved up for the unexpected. Savings accounts also open up opportunities to make more substantial financial decisions, such as vacations or new home deposits. Many banks that offer checking accounts also offer savings accounts that can be linked together for automatic deposits.

Reasons to keep it minimal

There are a few reasons why it’s best to hold only one to two bank accounts. First, it makes managing your finances much more accessible. Knowing that your withdrawals and deposits are all coming from a single source means that you’ll have an easier time avoiding overdraft and maintenance fees. It also makes it easier to track your expenses, knowing that your transactions are consolidated within one account.

Likewise, owning multiple bank accounts only increases the chances that you can fall victim to identity fraud. Having your personal and financial information floating around numerous banking companies gives fraudsters more opportunities to grab your data.

With a single checking account and a single savings account, you have everything you need to attain financial stability. However, to build on to your financial success, it may be reasonable for you to have even more bank accounts.

Reasons to have multiple bank accounts

Below is a brief overview of the reasons why you may want to open more than just a single checking and savings account.

Multiple savings accounts for separate goals. A great way to save for specific purposes is to open separate savings account for each goal. For example, you may want to open different savings accounts for a vacation, an emergency fund, and a new home deposit. This helps to keep track of goals progress better and avoid removing funds allocated towards each goal.

Shared Account with a spouse. Frequently married couples prefer having a joint checking account shared between them. This helps couples manage their conjoined lives easier. Some couples even prefer keeping their separate individual accounts as well as opening a joint account, for a total of three checking accounts among them.

Business accounts. Freelancers and business owners may find it beneficial to separate their business accounts from their personal accounts. The primary purpose of this would be to track revenue and expenses from said business better. Some banks even offer business-specific accounts with unique benefits and requirements.

Retirement accounts. At some point in your career, it’ll become possible to start allocating a fraction of your paycheck to retirement. There are several different options when it comes to retirement accounts, such as 401(k) plans, Roth IRAs, or investments.

Investment accounts. Signing up with a brokerage account for investment purposes is a great way to grow money passively. Once you’ve acquired a substantial amount of spare money, then opening a brokerage account for investing in stocks, real estate, or commodities could be a very smart life choice.

Bottom line

How many bank accounts should I have? The answer is different for every individual situation. However, owning just a single checking account is sufficient to get you by in life, and adding a savings account that can help you make more significant financial decisions. But as you become more comfortable managing your finances, many other bank account types are serving special financial purposes that can be added to your arsenal. Just make sure you are opening a new bank account for the right reasons.