Multiple Savings Accounts

Some people like to maintain more than one savings account, assigning different purposes to each one. For example, you might have a savings account designated for Christmas.

By contributing a little bit at a time throughout the year, holiday expenses might be less of a burden. As another example, you might be saving for a major purchase like a down payment on your first house.

There are many reasons to have multiple savings accounts, and as long as the accounts don’t come with fees that strip away your interest earnings, you should go this route if it is the best way for you to manage your savings.

The primary benefit to multiple savings accounts is the ability to keep tabs on how much money you have for specific purposes. With dedicated savings accounts, tracking your progress is easier.

The primary drawbacks are potential fees and the possibility that managing multiple accounts might be burdensome. Many online savings accounts, though, offer good rates with low minimum balances that allow you to avoid fees. With applicable online banking apps, it’s very easy to move money from one account to another.

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