Can You Have Too Many Bank Accounts? | MoneyLion (2024)

You may need multiple bank accounts if you want to build up your savings or keep your bank activity separate from one account to the next. But too many checking accounts can make managing your finances very difficult. Plus, you might have to pay bank fees on each of your accounts, which can add up rather quickly.

With too many bank accounts, your deposits and your withdrawals will affect a wide array of accounts, meaning you need to stay on top of your balances so that your checks don’t bounce as well. Can you have too many bank accounts?

Checking accounts vs savings account

Checking accounts give you easy access to your funds. You can pay your bills or withdraw your funds by writing checks and using a debit card either directly or via an ATM.

A savings account serves a different purpose because these accounts are designed to hold funds for longer periods of time, hence the savings part of the name. Savings accounts typically pay a higher rate of interest as well.

You will often have limited access to the funds in your savings account as well. But you can typically link your savings and checking accounts so that you can transfer funds between the two.

How many checking accounts can I have?

There is no limit to the number of checking accounts that you can have. But it’s a good idea to limit the number of accounts to an amount that you can reasonably and sustainably manage.

Too many checking accounts can make it harder to track deposits and withdrawals. When you have too many accounts, bank fees quickly add up as well.

Reasons for multiple checking accounts

You probably wouldn’t start opening checking accounts left, right and center, but sometimes, it might make sense to have multiple checking accounts. Here are a few reasons you might open more than one checking account.

Keeping certain deposits or withdrawals separate

Keeping funds separate can be tricky if you use only one checking account for your deposits and your bills. Multiple checking accounts prevent funds from getting mixed up or confused for one another.

For example, if you are self-employed, opening a separate checking account can help you keep your business activity separate from your personal transactions. So, as you can see, there are instances in which separate accounts make total sense.

You’re aiming to take advantage of certain banking perks

Banks frequently offer bonuses or incentives to people who open a new checking account. You might be able to obtain a lower rate on a loan or enjoy a higher interest rate on your savings account when you open a new account.

If the pros outweigh the cons, it may be worth it for you to open another checking account. Pay close attention to what the perks entail before you commit to them and open a new account.

Transferring funds between different accounts

Online checking accounts make it easy to bank remotely. You can pay your bills and make deposits from your phone or computer.

Additional accounts can make it easier to transfer funds between your accounts. You can withdraw cash at an ATM with a debit card or make deposits at a brick-and-mortar bank. And if you link both checking accounts together, you can easily transfer funds.

Can having too many bank accounts hurt your credit score?

The number of bank accounts that are open in your name typically will not impact your credit score. However, there are instances where your credit could be affected.

You could see a drop in your score if the bank performs a hard inquiry on your credit report. And if you carry a negative balance with your checking account for a long time, the bank could send this to collections, which could hurt your credit score as well.

What to look for in banking accounts

Switching banks is not a frequent or common occurrence, so it’s important to choose an account wisely because it is essentially a long-lasting tie between you and the bank. Here’s what you should consider when looking for a bank that you can trust with your new checking account.

Low fees

Nothing is more frustrating than being hit with fees when it comes to your own money. Bank fees can eat away at your balance, which is never a fun experience. However, some banks charge little to no fees as a way of enticing customers to open an account with the bank. To keep more money in your account, look for banks that offer free checking accounts without any monthly maintenance fees.

Low minimum balance requirements

The bank may require a minimum balance in your account to avoid fees. But if this is your first bank account or you find yourself strapped for cash regularly, these fees can be costly. A bank account with no minimum balance requirement gives you the most flexibility.

Large ATM network

ATMs make it easy to get cash when you need it. You’ll avoid having to pay fees when you withdraw your money from an ATM associated with your bank or a bank in your bank’s network. In most cases, if you go outside of your network, you can usually expect to pay a fee.

If you need to use an ATM, finding a bank with an extensive network of free ATM options can save you money by preventing you from having to pay unnecessary fees. Alternatively, you can choose a bank that reimburses people for part or all of the fees associated with out-of-network ATM withdrawals.

Good interest and banking perks

There are banks out there that will reward their customers with higher interest rates. You may need to carry a higher balance in your bank account in order to really benefit from these interest rates.

However, if keeping more money in your account does not cause you any financial strains, the higher rate can earn you extra money. Many bank accounts come with various other benefits that can save you money as well.

You can find checking accounts that will refund your ATM fees or offer cash rewards. To take advantage of these perks, you might be required to use your debit card, set up your paychecks so that they are directly deposited or use the bank’s mobile app.

Mobile banking

With online access, you can track your accounts from anywhere in the world. If you prefer to bank from the comfort of your home, open an account with a bank that offers robust online platforms and mobile apps. That way, you can make deposits, pay your bills and transfer funds without ever having to leave your home.

Accessibility

Choose banks that make it easy for you to open accounts with them. If you prefer to handle your accounts remotely, select a bank that has features you can manage online or from anywhere via their app. That said, if you like having a bank close by, consider opening your accounts at a local bank instead.

Transparency

When you open a bank account, you should know which fees you are responsible for and how much the fees amount to as well as how you can go about handling any and all disputes. With certain bank accounts, you might have to seek out this information on your own, and skimming through lengthy documents can be frustrating.

Luckily, other banks will clearly post this information on their websites. To protect your money, choose a bank that makes it easy for you to understand the fees you can expect to be charged.

Managing multiple bank accounts at once

The number of bank accounts that you actually need will be based on your personal preferences. In many cases, multiple bank accounts can help you achieve your financial goals.

However, too many bank accounts can be difficult as it could be hard for you to manage multiple accounts at once. You could have checks that bounce and end up having to pay more in bank fees than necessary. Before you open another account, make sure this is the right choice for you and your finances.

FAQ