
Let’s keep it simple: There’s no limit to the number of savings accounts you can open. The tricky part? Knowing whether or not it’s worth it to have multiple ones.
While opening more than one savings account may help you keep several savings goals (retirement, vacation, future down payment) organized, it could mean more monthly statements to track and balances to manage with potentially less overall interest earned across several accounts.
Your other option is to keep all of your savings in one account. But, when all your money is held as one lump sum, it can be tricky to keep track of your specific goals and the progress you’ve made toward each. So, how do you decide which savings method is best?
Read on to learn about the pros and cons of having multiple savings accounts. Plus, find out how you can separate your financial priorities and stay on top of them — all within one single account.
How many savings accounts can I open? Know the basics.
Savings accounts are generally easy to open, and as we already mentioned, there’s no limit or penalty for having multiple ones. Online savings accounts can be opened from just about anywhere and give you the convenience of 24/7 access to your funds.
When you open any type of savings account, whether at an online bank or brick-and-mortar, be sure to compare minimum opening deposits, minimum balance requirements and fees, along with interest rates and customer service reviews.
Ideally, you want to keep your money in a high-yield savings account to maximize your annual percentage yield (APY). APY is the total amount of interest you earn on a deposit account in a year. It factors in interest rates and compound interest.
Keep in mind, online banks like Ally Bank typically offer higher interest rates than traditional banks.
Benefits of Multiple Savings Accounts
Sometimes, having numerous, separate savings accounts can be a helpful component of a robust financial strategy.
Some banks allow you to link a savings account to your checking account to help protect you from overdrawing. If a transaction would overdraw your account, as long as your savings account contains enough funds, those funds will be transferred to your checking account to keep it from being overdrawn. In this scenario, the money in the account could help you avoid a fee from your bank, should you accidentally overdraw your checking balance.
In other instances, multiple accounts could help prevent you from spending your savings. How so?
A large factor of saving money is mental, and when you can see your money, you’re much more tempted to spend it. If you’re saving for a potentially large expense (like when building an emergency fund, an essential pillar of financial health) or long-term goals, you might think about opening a separate savings account. Keeping a separate account might help remind you not to touch that account for other spending purposes.
With these funds out of sight, they’ll be out of mind — reducing the urge to make withdrawals.
If you set up direct deposit, you can automatically put money in your account and allow it to grow — untouched and unseen — until you’re ready to use it.
Related: How to Put Your Savings Deposits on Cruise Control
Multiple savings accounts can also be a positive move for you if you’re married or considering combining finances with a partner. While you might open a joint savings account for things like mortgage payments and your children’s education, you may both also want to maintain your own personal savings accounts as well.
Lastly, opening more than one account could be beneficial if your savings exceed the limit insured by the Federal Deposit Insurance Corporation (FDIC). FDIC coverage caps at $250,000 per deposit account. That means if you’re holding more than that amount in one savings account, moving your excess funds to another account at a different FDIC-insured bank or financial institution can be a strategy to maximize your coverage and ensure protection for all your dollars.
Drawbacks of Multiple Savings Accounts
When you’re saving for multiple things at once, it’s difficult to keep things organized. Opening separate savings accounts for each goal (new car, emergency fund, kitchen expansion) is one solution.
But while this strategy will keep your money separated, it requires you to stay on top of multiple accounts and keep track of numerous balances, account numbers, and login credentials. Plus, you’ll have to deal with the inconvenience of transferring money across accounts — and possibly between different banks.
Not only will this require some serious organizational skills, but it can also be time consuming and cause additional wait times during money transfers. Plus, if you leave certain savings accounts out-of-sight and out-of-mind for too long, you might actually forget to tend to them — potentially stunting your savings strategy.
And finally, spreading your savings across different balances, accounts, and banks may leave you earning less overall interest, if the APY rates vary on the different accounts.
After hearing the pros and cons of multiple accounts, you’re probably wondering, is it possible to get the positive aspects of multiple accounts without the negatives? Is there another option? Let’s compare.
Compare the Benefits of Multiple vs. One Savings Account | |
---|---|
Multiple Savings Accounts | Our Online Savings Account |
Keep certain funds out of temptation's way in a separate account | Organize multiple savings goals in one place with up to 10 digital buckets |
Separate a joint savings account from a personal one | Visualize your progress on multiple goals at once |
Avoid exceeding the FDIC coverage limit per deposit account | Avoid tracking and balancing multiple savings accounts |
Depending on your bank, protect yourself from overdraft, if you have multiple checking accounts | Easily transfer funds between savings goals without limit |
One Account, Multiple Savings Goals
For a solution that combines the ease of keeping your savings in one single account with the organization of keeping your goals separate, consider our buckets tool, which allows you to separate your savings into different categories (up to 10), all within one Online Savings Account.
By divvying up your savings in customizable buckets (you can even make one for that designer handbag you’ve been dreaming of), you can easily visualize the progress you’re making toward all of your long- and short-term goals — no mental math required. You can take a quick look at the balance in your vacation bucket, for example, without having to subtract an upcoming house payment to check your progress.
This strategy can help you plan for all types of future costs, whether it’s holiday shopping or an annual bill you want to prepare for. Let’s say your homeowner’s insurance is $900 annually. If you divide that amount by 12, you get $75 — so you know if you deposit $75 into the dedicated homeowner’s insurance bucket each month, you’ll have enough for the premium when it’s due.
Naturally, your goals may change over time. That’s why the buckets tool is flexible and can be easily adjusted to stay in line with your priorities.
Plus, no matter how many separate buckets you use, you’ll still be taking advantage of compounding interest on the total amount in your account — so you can continue to accrue money on top of your already hard-earned savings.
You have multiple ambitions in life — as well as numerous financial goals. It’s time your savings account reflects that. With our Online Savings Account buckets tool, you can easily organize all of your various long- and short-term goals into digital envelopes to help you become a savvier saver. And when done strategically, multiple savings accounts can also be a beneficial tactic on your journey to wealth wellness. When it comes to smart saving, there’s no one-size-fits-all solution — and the best option is the one that works best for you.
Make your money perform smarter. Learn more about Ally’s new smart savings tools.
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Comment on this article
Comments
Nate C. on July 15, 2020 at 2:08am
This was very helpful and insightful. It also had exactly the information I was looking for! Thank you.
Ally on July 15, 2020 at 9:02am
We love hearing this Nate! Thank you for reading.
David W. on September 21, 2020 at 9:06pm
Horrible bank
S B. on October 8, 2020 at 1:20pm
Excellent idea--10 digital buckets within one account, including individual totals and graphs!
Jan on October 8, 2020 at 4:56pm
You are misleading. Headline said “Kamila reveals ugly truth about Biden.” Where is THAT story?
Lee on October 11, 2020 at 1:13pm
Have dealt with them in past they lie and do all they can to string u along on a claim end result only benifits ally.
MJ on October 17, 2020 at 2:15pm
Very Beneficial!!!! Thank you!
Ally on October 17, 2020 at 2:55pm
We love hearing this! Thanks for reading, MJ.
Peter A. on November 20, 2020 at 12:53pm
What is your Rate o CD ???
Ally on November 20, 2020 at 1:01pm
Hi Peter, you can find our CD rates here: https://www.ally.com/bank/cd-rates/
Kathy on November 23, 2020 at 8:20am
Stop trying to make this difficult. Sounds like you’re telling people they are to stupid to Handel more than one account. Stop it!
Eduardo on November 25, 2020 at 6:32am
Do you think it’s ok for people who make less the $2000 dollar Month when everything it’s very height pricrs
Larry H. on November 25, 2020 at 8:17pm
Who sent this to me and WHY? Unsubscribe
Charlie K. on November 27, 2020 at 8:02am
WARNING WARNING WARNING You should warn people of the Obama law that is about to be used for the first time very soon. It allows banks to confiscate your savings, pensions and retirement accounts over $5000. This is going to devistate the majority of Americas retirements. ALLOWED BY LAW. Protect yourself now and open as many $5000 accounts as you need to. WARNING WARNING WARNING
Terry on December 8, 2020 at 1:21pm
I assume the bucket approach regardless of the number can't exceed the 250 FDIC coverage amount guarantee.
Evelyn R. on December 16, 2020 at 6:56am
Not interested stop sending
Bob H. on December 16, 2020 at 7:12am
Please Unsubscribe me
Ally on December 16, 2020 at 7:42am
Hi Bob, if you would like to unsubscribe from Ally marketing Emails you can click the unsubscribe link in the footer of the Email.
John d. on December 21, 2020 at 12:09pm
BS bank
Lan P. on December 23, 2020 at 7:09pm
I can’t believe anyone spent this much time and words writing an article so about a subject so simple. Fire the writer and whoever delegated this task. And use their salaries to improve your clients interest rate!
Gary F. on December 26, 2020 at 1:35pm
Very informative, however, mentioned bucket but no in-depth info. I will contact you main web site for further info.
Ally on December 26, 2020 at 1:36pm
Thanks for the feedback, Gary! We’ll be sure to share your message with the team for further review.
Floyd on January 18, 2021 at 9:00am
Can multiple savings accounts at one institution have different benificiaries ,? Example. I would like to set up one for each child to get when I'm gone.
Sherry P. on January 23, 2021 at 1:53pm
Stop...Remove Me
Louis S. on January 23, 2021 at 2:10pm
By my mother's unfortunate experience, multiple accounts just open the door for dishonest CPA's. Limit your accounts to a few so you can monitor them closely. Remember, too, that once you deposit the money is no longer yours. You have a claim but the money is now the bank's.
Larry on January 25, 2021 at 12:57am
This is an excellent option for people like me that juggle multiple savings “buckets” using one account. Your product will be a time saver and it will allow me to more readily see my individual accounts positions at a glance each month. I love it. Thank you for making it available.
Naylor02@aol.com on January 25, 2021 at 2:00pm
Please unsubscribe me. Thanks
MJ L. on January 28, 2021 at 11:30am
You only make pennies on saving anyway.
Rodney2916@aol.com on January 28, 2021 at 2:12pm
Please remove my name and email address above from all future ads and emails......NOW !,,,,,,
DWSmith on January 28, 2021 at 2:24pm
Thank you for a well written and comprehension article. Yes it was informative, and the writer was very strategic in taking me through the pros and cons in an organized, logical and easy to read format. I had not thought about all the many reasons to consider; but I learned about some I needed to know to make sure I made the correct decision. I am grateful for the insight
Mike P. on January 29, 2021 at 11:16am
Never ever finance a car with Ally. Number one : when trying to call them you can expect to be put on hold for ever.. Number two: when you do get someone to answer, you can’t understand them, they will be from so country that you might have never Heard of. After I paid my car off and after 6 months I never got my title.
Roberta r. on January 29, 2021 at 3:28pm
I am 79 years old and I have bills too medical medications insurance received any check everyone I know I never receiver anything I am on as disability but does not cover much people I hear received money and came ahead doing work o on houses etc not fair MI paid into taxes before if you are retired with no pension or disabled we need it more Does not seem right thank you for reading this
Roberta r. on January 29, 2021 at 3:28pm
I am 79 years old and I have bills too medical medications insurance received any check everyone I know I never receiver anything I am on as disability but does not cover much people I hear received money and came ahead doing work o on houses etc not fair MI paid into taxes before if you are retired with no pension or disabled we need it more Does not seem right thank you for reading this
Roberta r. on January 29, 2021 at 3:28pm
I am 79 years old and I have bills too medical medications insurance received any check everyone I know I never receiver anything I am on as disability but does not cover much people I hear received money and came ahead doing work o on houses etc not fair MI paid into taxes before if you are retired with no pension or disabled we need it more Does not seem right thank you for reading this
Roberta r. on January 29, 2021 at 3:28pm
I am 79 years old and I have bills too medical medications insurance received any check everyone I know I never receiver anything I am on as disability but does not cover much people I hear received money and came ahead doing work o on houses etc not fair MI paid into taxes before if you are retired with no pension or disabled we need it more Does not seem right thank you for reading this
Roberta r. on January 29, 2021 at 3:28pm
I am 79 years old and I have bills too medical medications insurance received any check everyone I know I never receiver anything I am on as disability but does not cover much people I hear received money and came ahead doing work o on houses etc not fair MI paid into taxes before if you are retired with no pension or disabled we need it more Does not seem right thank you for reading this
Sokhom t. on January 30, 2021 at 6:43pm
Sokhom then
Karen S. on February 5, 2021 at 10:40pm
That was very helpful for me and others thanks! L
Steven A. on February 10, 2021 at 6:26am
This is a good article but I do not have temptations when I put money in a savings account I will not touch it until I am ready to use it for what I planned for
Barry on February 16, 2021 at 8:39am
Ally is a terrible bank to do business with
Liz F. on February 17, 2021 at 8:27am
Do you have money market accounts?
David S. on February 21, 2021 at 9:19am
Take me off your list in subscribe
Diane G. on February 25, 2021 at 2:00pm
GET ME OFF YOUR LIST. UNSUBSCRIBE ME. NOW!!
Joy on February 28, 2021 at 10:57am
Where is the unsubscribe ? I do not want emails from you.
Alex on February 28, 2021 at 2:51pm
I do not need you to give me financial advice
Rodney h. on April 8, 2021 at 1:29pm
Hola
Paul on April 12, 2021 at 10:50am
Please unsubscribe me. I am not a member of your bank do want to be
Callie on April 25, 2021 at 5:45pm
We open multiple accounts because of FDIC limits.
Mary K. on May 4, 2021 at 3:21am
Not interested. Please stop!
r40v42@aol.com on May 10, 2021 at 1:03pm
Please remove me from your mailing list
C on July 24, 2021 at 5:47am
Why even worry about interest on any bank account. Today it is a joke, this month I received interest of 45 cents on an account that is over $100,000
CS on July 28, 2021 at 4:56pm
Aren’t you the bank that took a little girls pony away?
JKantrowitz50@aol.com on July 28, 2021 at 5:56pm
What are your current savings plans available and what are the interest rates. I am a senior, do you have special plans for seniors. If I have an account with your bank are there any advantages when trying to get a loan (ie, car loan , personal loan, etc)?
Ally on July 28, 2021 at 5:58pm
Hi, thanks for your interest. You can find our most up-to-date rates here: https://www.ally.com/bank/online-savings-account/. Give us a call at 1-877-247-2559, or chat with us at ally.com for any additional questions and assistance getting started.
tjohnston.johnston87@gmail.com on October 19, 2021 at 4:58pm
What about a master checking account with subaccounts? Do you offer such?
Ally on October 19, 2021 at 4:59pm
Hi, please give us a call at 1-877-247-2559 or chat with us online at ally.com, so a team member can assist further.
Darron h. on January 10, 2022 at 9:54pm
This was very useful, it did not have the exact information I needed, but there was enough for me to make, a good decision, thank you..