Do you want to start saving for a home? For retirement? For Christmas gifts? For a master’s degree? To keep your specific goals aligned—and to track your progress in each—many financial consultants suggest opening multiple bank accounts earmarked for each goal. Because the costs of opening a savings account are low, there's no reason not to open multiple accounts for your many goals, needs, and ambitions.
Carol Kaplan, director of communications for the American Bankers Association, said in an interview with Ally, "Research shows that when people create accounts for a purpose, they're more successful in reaching their goals. It's easier for them to focus. If you want to go on a big vacation next year, consider opening an account devoted just to that. Open another one to buy a car." Kaplan says there's no disadvantage to having multiple savings accounts as long as you remain mindful of the limits on Federal Deposit Insurance Corporation (FDIC) insurance protection in one bank.
Ally also interviewed George Barany, director of financial education at America Saves, a national, non-profit coalition of various groups that promotes saving. "Having a specific goal really helps," says Barany. "The number-one goal of many participants in our program is establishing a rainy-day emergency fund. We recommend setting a goal of $500. For many people, that's more obtainable than six months' salary."
Of course, there are good reasons to set up a savings account besides being prepared for an emergency. There's also the common-sense practice of putting money aside today for spending tomorrow. Pick some future cost you know you will incur—payment of your homeowners' insurance, for example. Divide the amount by 12, and deposit that amount every month into a savings account dedicated to that use. Ask your bank to transfer the monthly amount automatically from your checking account into savings. When the year is up and you've saved the full amount, transfer it back to checking and make the payment. Don't forget that at Ally we compound interest on a daily basis, meaning your money is always working for you, even while it waits.
Take a look at Ally's Online Savings Account and Money Market Account and get started on your multiple savings account strategy.