Money at 30: How Many Bank Accounts is Too Many?

Soon after I turned 18, I opened my first solo bank account. It was a checking account with Wells Fargo but, like a good boy, I also let them talk me into opening a savings account with automated savings. For a long time that checking account would remain the sole home for all of my funds (the savings account fell by the wayside after years of me constantly stealing its contents), until just a few years ago.

Now I have way more accounts — like, arguably too many.  Between the two of us (and excluding retirement accounts and the like), my wife and I have that checking account at Wells Fargo, checking, savings, and a growth account with PNC, checking and savings with Discover Bank, an automated savings plan with Clarity Money, and a small PayPal balance if you want to count that. This raises the question “how many bank accounts is too many?” While I don’t have an exact answer to that question, here are a few considerations to make when deciding to open or close more accounts:

Benefits

Why have so many bank accounts? Well, in our case, each comes with its own perks. For example, my Discover Bank savings account offers an interest rate north of 1% while I also earn $.10 cash back every time I use my Discover checking account. Because of this, moving my extra cash over to my savings and keeping a little bit in my checking for small purchases (under $10) makes perfect sense to me.

It’s a similar situation for my wife. In addition to her typical checking and savings accounts at PNC, she also has what they call a “growth” account, intended for long-term savings. As a result, by making a certain number of purchases each month and/or meeting other criteria, she can boost the interest rate on that account, making it worth holding on to.

Fees

One reason you absolutely wouldn’t want more bank accounts is if they’re costing you money to use them. These days several big banks like to charge all sorts of fees, including generic “maintenance fees” that require you to maintain a certain daily balance. In essence, they’ll take money from you for having too little money — logical right?

Thankfully, of all of the accounts we hold, only the Bank of America accont has such limitations. So why hold onto these accounts? Sadly, B of A is the only bank we use that has branches in our area. This actually brings me to my next topic…

Access

Another major reason we have so many bank accounts is due to the different accessibility they offer (or don’t offer). Case in point: while those Discover accounts I mentioned pay well,  there are limits on how many money transfers I can make in a month. Additionally, as I may have mentioned before, neither my main bank nor my wife’s have branches anywhere near our home city. Even with the amazing capabilities of mobile and online banking these days, sometimes you still need a “real” bank to go to for some quick cash.

Purpose

Finally, a potential reason an individual or couple might like to maintain a number of bank accounts is so that each one can be assigned a distinct purpose. Perhaps you could have one account that serves strictly as an emergency fund while another acts as your revolving vacation account. Granted some might find this unnecessary and elect to simply earmark their funds in other ways, but I honestly don’t have a problem with such a plan — assuming you’re not paying any fees, of course.

Do I have too many bank accounts? Perhaps, but at least we have a good reason for maintaining all of them, ranging from the interest rate they provide us on our savings to the ATM accessibility they offer. Better yet, with some exceptions, none of these accounts charge us fees for using them, so what’s the harm? As long as there are clear benefits to each of your active bank accounts, I say the more the merrier.