How many checking accounts should i have

These deposit accounts give consumers a place to deposit their money, make transfers, write checks, pay bills, and do other routine banking transactions. Before you open a checking account, you should know your options. After all, not all checking accounts are created alike. How much you plan on keeping on average every month will help you decide which type of checking account to open up.

Will this balance be consistent throughout the lifetime of the account? Or will you only have a large balance at certain times during the year? Some accounts come with minimum balance requirements—which justify some of their perks—so you should keep that in mind. Consider the fees associated with each type of account. You can avoid monthly service charges if you maintain a certain balance every month.

Maybe you can avoid certain fees by having automatic payments deducted for bills from your account or by setting up direct deposits. Knowing about the bank and its fee structures for each account can mean the difference between saving a lot of money or spending hundreds of unnecessary dollars in fees each year.

Although you may not collect much, some checking accounts do pay interest. Interest is generally calculated on a daily basis and deposited directly into the checking account at the end of each month. You may have to pay a monthly fee for the privilege of being an account holder, but many banks waive the fee if you keep enough money in your account.

A regular checking account usually pays little or no interest on your balance. If you have a five-figure sum or more to keep in a checking account, a premium checking account may be right for you. Having that high a balance in your account should allow you to avoid paying a monthly fee and provide perks such as ATM fee reimbursements, free checks, and earning a little bit of interest.

You may also receive discounts on other services from the bank, such as a slightly lower mortgage interest rate or free financial advice. The extra perks definitely sound great, but other options could work out even better. For example, you may earn a higher return on your excess cash while still keeping it accessible for emergencies by putting it in a money market account , government bonds, or a certificate of deposit CD.

As for the discounted services and free advice, you may get a better rate on services or better advice with another institution. A premium checking account may not be your best option, even if you can easily meet the minimum balance requirement. Interest-bearing checking accounts give you a small return every month for the balance in your account. Some accounts pay a flat interest rate regardless of your balance, while others pay more on higher balances. The interest rate will almost certainly be below the inflation rate, but it might be comparable to what some savings accounts pay, giving you the best of both worlds—unlimited transactions and monthly interest payments—in a single account.

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Advertiser Disclosure. By Ben Luthi. Start Now for Free. Latest Research. No one wants to be hounded over relatively small purchases, especially not by your spouse. If you have a specific savings goal in mind, separate and apart from your emergency fund, open another account. A higher yielding certificate of deposit CD is a good avenue, and will help inoculate the funds from mindless spending.

Also, banks may come out with newer products that offer better options. Or sometimes the older accounts are better. So evaluate your options to see if a new account fits your needs. These can be a great opportunity to earn more money. When opening a new account, one of the first things you should check into are minimum balance requirements and fees. If an account does have fees, you can usually waive these by keeping a minimum balance in the account or by having a certain amount direct deposited each month.

Having too many accounts can cause you to miss fraudulent activity, be overcharged or double-charged for a purchase or incur other activity that costs you money. Research any new account before opening it. This includes reading the account agreement, disclosures or any other relevant information that can help you understand the account now to avoid problems later. Make sure you ask any questions you have before opening the account.

When you close an account, make sure you inform your bank. Simply leaving your account balance at zero could cause a domino effect of maintenance fees and overdraft fees. How We Make Money. Matthew Goldberg. Written by. Matthew Goldberg is a consumer banking reporter at Bankrate. Matthew has been in financial services for more than a decade, in banking and insurance. Edited By Brian Beers. Aliche recommended that you do not get a debit card for this account. This way, you won't be tempted to spend your bills money on other things.

When you want to spend money, you can use your other checking account. This checking account is for everything other than your bills. You could use it for entertainment, meals at restaurants, or gifts for friends and family. Go ahead and attach your debit card to this account, because the money is primarily for spending.

An emergency fund is money you only use when the unexpected happens. Maybe you lose your job, or your car breaks down, or you receive a huge hospital bill.

You only touch this money if there is an emergency, so it's wise to keep it in an account that's separate from the ones you use for bills or other savings goals. Most experts recommend setting aside three to six months of necessary expenses in your emergency fund. The rule of thumb is that you should have six months' expenses if you are a one-income household and three months' expenses in a two-income household. Finally, there's an account for other big savings goals.

You might use this account to stash away money to buy a car , make a down payment on a home , or go on a vacation. If you use a bank that makes it easy to save for separate goals , you could even create individual savings buckets for each goal in one account.

Aliche called her budgeting method "split it before you get it. By splitting up your paycheck before it hits your bank account, you won't be tempted to spend money you don't have. You'll also consistently work toward your savings goals without even thinking about it. To split it before you get it, you'll need to do the math beforehand. Figure out how much you put toward all of your bills each month, what you need in an emergency fund, how much you'll need for a big purchase, and how much you have left over.

If your employer can't divvy up your paycheck for you, Aliche said there's a simple solution: Ask them to deposit the full paycheck into your bills checking account. Then you can set up the transfers yourself. Your bank probably has a tool for setting up recurring transfers each time you get paid so that you don't have to remember every time.

Over her five years of covering personal finance, she has written extensively about ways to save. Disclosure: This post may highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy.

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