How many savings accounts should I have? Here’s what the experts say

It may be easier to manage just one, but opening a separate savings account for each financial goal can help you track, prioritize, and even accelerate your progress. On the other hand, some banks limit the number of accounts you can open. And the more accounts you have, the more time you have to dedicate to managing them.

Why you might need more than one savings account

If you’ve always had just one savings account, adding another might seem unnecessary or even burdensome. But opening another account (or two) could have surprising benefits. 

“Having multiple savings accounts can help you better organize your finances,” says Jennifer Papa, senior administrative certified credit counselor at American Consumer Credit Counseling (ACCC). In particular, separate accounts can come in handy when you’re working toward different short- and long-term savings goals simultaneously, including:

“Having a different account for each type of savings can make it easier to track your progress towards your goals, and make sure you are saving enough for each specific purpose,” explains Papa. Multiple accounts can also be useful if you’re contributing toward a shared fund or expense with a spouse or your children, but still want to keep an account of your own.

Is there a limit to the number of savings accounts you can have?

There’s no limit to the total number of savings accounts you can have across all financial institutions, but some banks set limits for their customers. Ally Bank, for example, allows up to 10 savings and/or money market accounts per person, while Barclays allows 25 total accounts. Some banks, such as Citibank, have no limit at all.

Using sub-accounts

Some savings accounts have a sub-savings account feature, which allows you to split funds in one primary savings account into separate categories. Depending on the bank, you might be able to give names to each sub-savings category and set up automatic transfers to and from your sub-accounts. 

Using this feature, as opposed to having separate savings accounts, can make it easier to track and manage multiple savings funds. On the other hand, it could mean missing out on some of the benefits you get from spreading your savings across multiple accounts.

Banks with sub-savings accounts include Sally Mae’s SmartyPig account, which lets you set and track multiple savings goals, and Ally Bank’s Online Savings account, which has a useful “buckets” feature. 

“Ally’s savings buckets allow for organization and visualization of your goals,” explains Sonia Fraher, senior director of product and strategy at Ally. “While we allow up to 10 savings or money market accounts per customer, you can have up to 10 buckets on each savings account, so you may not need multiple accounts at all.”

Pros and cons of multiple savings accounts

Having multiple savings accounts can help you prioritize your financial goals, but there are downsides too. “It could require additional time and effort to manage multiple accounts, including transferring funds between accounts, reconciling statements, and staying organized,” says Papa. 

Before you decide how many accounts you need, consider the pros and cons of having more than one:

Pros

• Prioritize multiple goals: Creating separate accounts or buckets can remind you to work toward each separate financial goal, rather than just lumping your spare cash into one fund. It can also serve as a reminder of what you’re working toward and deter you from dipping into your surplus cash.
• Track your progress: Separating your savings balances from one another can help you track your progress toward each goal at a glance, and allow you to reassess your savings strategy as your balances grow.
• Bank incentives: Some banks offer relationship discounts, welcome offers, or referral rewards to account holders, so opening multiple accounts could mean opportunities to earn more cash or discounts.
• Insure your money: The Federal Deposit Insurance Corporation (FDIC) insures balances of up to $250,000 in combined deposits per depositor, per bank. Similarly, the National Credit Union Administration (NCUA) protects up to $250,000 in deposits held at credit unions. So if you have a large amount of savings, spreading cash across institutions will ensure all of your money stays protected in case of a bank failure. 
• More access: Some savings accounts limit the number of withdrawals you can make per month, so having multiple savings accounts could give you more access to your cash when needed.

Cons 

• More maintenance: With multiple accounts, you’ll need to invest more time into monitoring account statements and looking out for issues such as unauthorized transactions.
• Account fees: Having multiple accounts means greater likelihood of being charged maintenance or service fees.
• Minimum balances: Spreading cash across multiple accounts can also make it harder to meet minimum balance requirements, which are common with certain types of savings accounts.
• Lower APY tiers: Some savings accounts offer higher interest rates for higher balances, so less cash in each account could mean missing out on the best rates.

Tips for managing more than one savings account 

The first step to managing multiple saving accounts successfully is choosing the right accounts. When deciding where to deposit your cash, pay attention to details such as minimum balance requirements, maintenance fees, and annual percentage yield (APY) tiers. 

“Think about the type of savings account you need to reach your goals,” Fraher advises. “For example, in the current high rate environment, a high-yield savings account is a great option to earn more interest and accelerate your savings.”

Once you open your savings accounts, you can use the built-in features that support ongoing account management. “Leveraging digital tools within your accounts is a great way to maximize your savings—whether you have one savings account or multiple,” says Fraher.

For example:

• Name each account to correspond with your savings goal.
• Set up text or email alerts to stay on top of account activity.
• Set up automatic deposits from your paycheck to correspond with your savings goals.

Finally, plan to revisit your savings strategy every six months or so. As your balances grow, you’ll want to review interest rate structures and fees, and move funds around accordingly. 

“Interest rates on savings accounts can vary and they could change over time,” says Papa. “Make sure you keep track of the interest rates on your savings accounts, and consider moving your funds to an account with a higher interest rate if it makes financial sense.”

Papa also suggests consulting with a tax professional to make sure you’re managing the interest earned on your savings in a tax-efficient manner.

The takeaway 

Having multiple savings accounts isn’t for everyone. Opening more accounts means more time monitoring bank activity, and neglecting the accounts could result in unexpected fees.

On the other hand, opening separate accounts, or using sub-savings accounts or buckets, could be the strategy you need to boost your savings efforts. If you’re willing to put in the research and choose no-fee, high-APY saving accounts, the result could be a shorter path to achieving your financial goals.