Should You Have More Than One Bank Account?

There's no magic number when it comes to how many bank accounts you should have. Different accounts can serve different purposes, and keeping money in separate "buckets" can make it easier to manage spending and track progress toward your goals.

 

 

As your needs change, there are reasons for separate accounts to help manage and organize your money.

 

An emergency fund can help you prepare for unexpected expenses. Because you may need the money quickly, a savings or flexible money market account may make more sense.

• Redirect one expense. If you cancel a $15 monthly subscription, consider automatically transferring that $15 to your emergency fund instead.
• Automate it. Set up an automatic transfer on payday—even $25 or $50 at a time can help.
• Use unexpected income. Consider putting part of a tax refund, bonus, or gift toward your emergency fund.

 

 

From a dream vacation to a home project or major purchase, keeping money for a specific goal separate can make progress easier to track. Consider when you'll need the money and how easily you'll need to access it, then compare CDs and money market accounts to see which may better fit your timeline and need for flexibility.

Start with how much you'll need and when you'll need it, then determine how much to set aside each month. Use our Savings Goal Calculator to see what may be realistic for your timeline and budget.

 

 

If you're establishing or rebuilding credit, a Goal Setter Account can help you build credit while growing your savings. A short-term loan funds a CD and on-time payments can help establish payment history. Once the CD matures and your loan is paid, you have money (plus interest earned on the CD) saved for what's next.

 

Generally, checking and savings accounts don't build credit because you're using your own money rather than borrowing. If you're new to credit, start by understanding how your credit works. Making payments on time and using credit responsibly can help establish a positive credit history over time.

 

 

A checking account designated for household expenses can make it easier to separate recurring bills from everyday spending. Also, consider benefits that add value to expenses you're already paying. For example, paying your cell phone bill with First Mid Benefits Checking gives you cell phone protection for eligible repair or replacement costs.

 

• Split your direct deposit. Direct a set amount of each paycheck to the account you use for recurring bills.
• Match bills to your pay schedule. Ask providers if you can adjust due dates to better align with your payday. 
• Build in a buffer. Keep a little extra in your bills account for expenses that vary from month to month, such as utilities.

Whether you're saving for education, a first car, or a financial head start, small contributions can add up over time. Consider putting a portion of birthday, holiday, or other milestone money toward their future. As your child gets older, involving them in the goal by saving part of gifts or earnings can also help introduce good money habits. Revisit your savings goal as your child—and your plans—grow.

 

A traditional savings or money market account generally provides more flexibility, while a 529 Savings Plan is designed for education and offers tax advantages when funds are used for qualified education expenses. Consider your goal, timeline, and how you expect to use the money when comparing your options.

 

Some financial goals have accounts specifically designed for them and may offer potential tax advantages.

 

Planning for retirement? An IRA offers tax advantages for retirement savings, and starting early gives your money more time to grow.

 

Saving for healthcare expenses? If eligible, an HSA offers tax advantages for qualified medical expenses, and unused funds can roll over year to year.

 

Eligibility requirements, contribution limits, withdrawal rules, and tax considerations can vary, so understand how an account works before deciding whether it fits your needs.

 

 

Before opening another account, ask yourself:

• What job will this account have? Bills, everyday spending, emergency fund, or a specific goal?
• Will separating the money make it easier to manage? 
• When will I need the money, and how easily will I need to access it? 
• Are there fees, balance requirements, or benefits I should consider? 

 

Big moments can change how you save. Explore ways to Prepare Your Savings for Life's Biggest Moments, from buying a home to growing your family.

 

Think another account could help? Explore your options and open online on your time—with local support when you need it.