How Many Savings Accounts Should I Have?

Savings accounts can offer a safe place to keep your money until you’re ready to spend it. Having multiple savings accounts could make sense if you want to set aside money for different goals. There are some advantages to opening more than one savings account when you have competing financial goals, as opposed to lumping all of your savings together in a single account.

If you’re wondering whether it’s something you should consider, here’s what you need to know.

How Many Savings Accounts Should I Have?

The short answer to this question is as many as you need. But the actual answer depends on how many different savings goals you’re working toward.

For example, your list of savings goals might include:

Planning a vacation
Saving money toward a down payment on a home
Paying for home repairs or renovations if you already own a home
Shoring up your emergency fund
Saving money toward college expenses for your kids
Planning a wedding
Funding a move
Saving for retirement
Buying furniture
Setting aside money to start a business
Saving money for various sinking funds, such as biannual insurance premiums or property tax payments

Each of these goals is very different. For example, you might need to save tens of thousands of dollars for a down payment on a home. But your savings goal for paying annual insurance premiums may be less than $1,000.

Setting up multiple savings accounts for each goal could make it easier to track your progress. And, when you need to tap into those funds, you can do so without worrying that you’re taking money away from another goal.

Is It a Good Idea to Have Multiple Savings Accounts?

Having multiple savings accounts could be a smart move if you have very targeted financial goals. It makes it easier to keep those goals separate and prioritize how much and how often you save toward them.

For example, say you have three primary savings goals: building an emergency fund, creating a new-to-you car-buying fund and saving money for new furniture. You could then establish specific targeted goals for saving:

$5,000 for your emergency fund
$5,000 for your car fund
$1,500 for new furniture

You can then break those goals down further by assigning a specific time frame to each one. So say you want to reach your $5,000 emergency fund goal in the next five months. You’ll need to save $1,000 a month in that account to reach your goal.

You could then apply that same formula to your other savings accounts so you know how much to put into each one to reach your goal.

When you’re saving money in one savings account, on the other hand, you may lose sight of those individual numbers and focus only on the total balance. It becomes a little more challenging to track your goals, especially if you’re saving for many things in the same account.

Separating savings goals into individual accounts is a more strategic approach that requires you to be mindful and intentional about how much you save each month.

Pros of Having Multiple Savings Accounts

Having multiple savings accounts can yield some advantages. If you’re on the fence about whether you should open multiple savings accounts, here are the best reasons to consider doing so.

It’s Easier to Monitor Your Savings Progress

This has already been mentioned, but it’s worth repeating: Having multiple savings accounts makes it easy to see at a glance how well you’re doing with your savings goals. If you check your account balances and see that you’re behind on a goal, you can brainstorm ways to get caught up.

But what if your savings accounts are at different banks? One solution is to use a budgeting app that allows you to sync all of your accounts. This way, you only have to log in to one app to see how much you have saved in each account.

You Could Take Advantage of Higher Interest Rates

When adding money to a savings account, the interest rate matters because it determines how quickly your money can grow. Not all savings accounts are equal when it comes to interest rates and the corresponding annual percentage yield (APY) they earn.

Spreading your money out across different savings accounts from various banks could help you take advantage of higher interest rates. For example, your brick-and-mortar bank may pay a lower APY for a regular savings account versus a high-yield savings account at an online bank.

You may also find that some savings accounts reward you with higher rates for maintaining higher balances. For instance, an online bank may pay one APY up to the first $10,000 you save and a higher APY up to the first $25,000.

You May Be Able to Cash In on New Bank Account Bonuses

Some banks offer incentives to encourage people to open new savings accounts. For example, you may collect a $150 cash bonus for opening a savings account and making a minimum number of deposits within the first three to six months.

These bonuses can be an excellent way to grow your savings without any extra effort. But banks may impose a one-bonus-per-customer rule. Opening multiple savings accounts at different banks offers a work-around so you may qualify to earn numerous new account bonuses.

Keep in mind that bank account bonuses are taxable. But collecting bonuses with multiple savings accounts can be an easy way to grow your balances.

You Can Protect Your Cash If You’re a Super Saver

FDIC insurance coverage protects your savings accounts and other bank accounts, but only up to certain limits. That current limit is $250,000 per depositor, per insured bank, per ownership category, across all your accounts.

If you’re a super saver with more than $250,000 total across your various savings accounts, opening multiple accounts at different banks could make sense. You could continue earning interest on savings while staying within the FDIC coverage limits at each bank. If one of the financial institutions you bank with fails, you’ll have some peace of mind knowing that you’re protected.

Cons of Having Multiple Savings Accounts

Now that you know the benefits of having multiple savings accounts, there are a few downsides to keep in mind.

Multiple Accounts Can Be Difficult to Keep Track Of

Unless you’re organized, having multiple savings accounts could quickly get confusing. It can be especially tricky if each account is at a different bank.

Using a mobile budgeting app that allows you to sync your various accounts could make keeping tabs on them more manageable. But if you’re trying to schedule an automatic deposit or electronic withdrawal, things could still get tricky.

You could even forget about one or more of your savings accounts if you don’t use them that often. In this case, your bank may charge an inactivity fee, convert your savings account to a checking account or close it altogether.

It May Trigger Fees

Bank fees can nibble away at the interest you earn on your savings. With savings accounts, one fee to watch out for is a minimum balance fee.

Banks can charge a minimum balance fee if your account falls below a certain amount. If you cannot meet the minimum balance requirements for each of your savings accounts, you could easily incur a pile of fees each month.

Also, make sure to consider excess withdrawal fees. If you’re frequently withdrawing money from savings, your bank could charge you one or more excess withdrawal fees, which could drain your cash reserves.

You Could Lose Out on Higher Interest Rates

Opening multiple savings accounts can help you earn more interest, but it’s essential to read the fine print. Again, some banks have a tiered interest rate structure for savings accounts, meaning you may only earn the highest rates once your balance reaches a certain amount.

If you’re saving in multiple accounts with tiered rates, it may take time to work up to the minimum threshold for each one to earn the highest APY. And if your balance dips below that threshold at any time, your rate may revert to a lower one.

How Much Savings Should I Have?

The amount of savings you should have can depend on several factors, including your age, income, expenses and your savings goals. For example, let’s say you’re building an emergency fund and plan to set three to six months’ worth of expenses in savings (a common recommendation from financial experts). If your monthly expenses are $3,000, you’ll need $9,000 to $18,000 in savings.

You can also follow a different plan to build your emergency fund based on how much you can save and your goal—such as holding a certain amount of money per person in your household. For example, you may choose to save $3,000 per person. If you’re married and have one child, you’ll need to save $9,000.

Ultimately, the amount you should have in savings is the amount that makes you most comfortable. If you’re confident that you could replace your job reasonably quickly if you were to get laid off, for instance, then a smaller amount of emergency savings might suffice. On the other hand, you may want to set aside nine to 12 months’ worth of expenses in emergency savings if you’re self-employed, are concerned about an illness or injury keeping you from working or think it might take longer to replace a lost job.

Which Types of Savings Accounts Are Best?

Another thing to consider when setting up multiple savings accounts is which ones to use as part of your savings plan.

For instance, you could open any of the following:

Regular savings account at a traditional bank
High-yield savings account at an online bank
Christmas Club or other specialty savings account
Regular money market savings account
High-yield money market savings account

You can use all of these to fund your savings goals. Regarding which savings account option is best, it typically comes down to things like the fees the bank charges, the interest rate the bank pays and the minimum balance requirements. Getting the highest rate with the lowest fees may be the best combination for utilizing more than one savings account.

Also, keep in mind how you’ll access your savings to make withdrawals or deposits. If you mostly bank using mobile apps or online banking, an online bank can offer everything you need.

On the other hand, if you routinely need to deposit cash or prefer depositing money with a teller, you may want to have at least one savings account at a brick-and-mortar bank or credit union.

Finally, remember to review your savings accounts consistently to make sure they still fit your needs. If you find that the fees have crept up or the bank has slashed the interest rate they’re paying on savings, you may want to shop around for a new account elsewhere.

How to Manage Multiple Savings Account

Managing multiple savings accounts doesn’t have to be difficult, but it does require a little planning and organization. Here are a few steps to take:

Decide how you’ll use each savings account. For example, you might keep your emergency fund in one savings account, money for short-term goals in a second savings account and money you want to save for long-term goals in a third savings account.
Decide how much you’ll save in each account monthly. The dollar amount you save in each account depends on your budget and how you plan to use each savings account.
Automate your savings. Once you work through the steps above, you can automate deposits to grow your savings.

Here are a few other things to keep in mind when managing multiple savings accounts.

Monthly Maintenance Fees

Monthly maintenance fees can detract from your efforts to grow your savings, even if the fee seems small, say $5 a month—a $5 per month fee is $60 per year. This is why it’s important to consider the monthly maintenance fee and what you can do to avoid it when managing multiple savings accounts.

Even if a savings account comes with a monthly maintenance fee, there may be a way to avoid it. For example, some banks waive monthly maintenance fees for savings accounts if you meet certain requirements, like opening a checking account with the same bank, scheduling one or more recurring direct deposits or maintaining a certain minimum balance. If you have multiple savings accounts that charge a monthly fee and there’s no way to waive it, it may be worth moving your savings elsewhere.

Online banks, for example, often offer high-yield savings accounts with no monthly maintenance fees. You could keep a checking account at a brick-and-mortar bank and link it to a savings account at an online bank for easy transfers when you need to access cash.

High Interest Rates

The higher the interest rate on your savings account, the more potential your money has to grow. If you have multiple savings accounts, it’s good to know what interest rate and APY you’re earning on each one to determine if maintaining the account is worthwhile.

Consider online banks and credit unions for some of the highest rates available.

Saving Account Withdrawal Limit

Savings accounts are meant to hold the money you don’t plan to spend right away. Still, you may want to make a withdrawal at some point. Your bank may have a saving account withdrawal limit that determines how often you can take money out of your account without paying a fee.

Previously, the Federal Reserve limited savers to six withdrawals per month from a savings account. This rule, called Regulation D, was suspended in 2020 to allow savers easier access to their money. But banks can still impose a saving account withdrawal limit. Know how many withdrawals you’re allowed to make per month and the fee you’ll pay for going over the limit. This can help you better coordinate withdrawals from multiple savings accounts.

Top Banks for Multiple Savings Accounts

Online banks and credit unions typically offer the best combination of high interest rates and low fees, making them ideal places for keeping multiple savings accounts. Some of the best high-yield savings accounts of 2024 come from both online banks and credit unions. But where you keep a savings account depends on what you need.

An online bank could be right for you if you don’t mind forgoing branch banking access.

When comparing high-yield savings accounts at online banks, it’s important to consider these basics:

Interest rate and APY
Minimum deposit requirement
Minimum balance requirement
Compounding frequency
Monthly maintenance fee
Other fees, including excess withdrawal fees
Online and mobile banking access
Daily, weekly and monthly limits on deposits and withdrawals
ATM access

If you’re considering brick-and-mortar banks, weigh the same factors that you would when comparing savings accounts at online banks.

Bottom Line

Opening multiple savings accounts may make sense if you have various financial goals that you’re working toward and you want separate funds for each. Before opening multiple accounts, do your research and compare fees, interest rates and other features to pinpoint which savings accounts are best for meeting your money goals.

Frequently Asked Questions (FAQs)

How many bank accounts are too many?

There is no set number of bank accounts that could be considered too many—it all depends on how many you can realistically manage. When deciding whether you have too many bank accounts, consider whether you can manage them and if they are costing you money through excessive fees.

Does it cost money to have multiple savings accounts?

It can cost money to have multiple savings accounts. This can happen if you pay monthly maintenance fees or other fees each month. To keep costs down, look for savings accounts that charge few fees.

Can you open multiple savings accounts at the same bank?

Yes, you can often open multiple savings accounts at the same bank.

How many checking and savings accounts should I have?

It depends on your needs. Generally, it can be beneficial to have at least one checking account and one savings account, but there’s no correct number of bank accounts. Depending on your financial goals, you may find having more than one bank account makes sense.