How Many Checking Accounts Should I Have?

For many people, a single checking account works just fine. But depending on your situation, it might make sense to have more than one checking account. Read on to learn whether this approach might benefit you.

Can you have more than one checking account?

Yes, you can have more than one checking account. You can open multiple checking accounts at the same credit union or bank, or open accounts at different financial institutions. While there’s no limit on the total number of checking accounts you can open, a particular bank may have limits.

Stay organized and on budget

Using more than one checking account can help you organize your finances. You might have one checking account for recurring household expenses, for example, and another for fluctuating bills like credit card payments. Or you could have one checking account for household expenses and another for “fun money.” Separating your finances this way may help you be more intentional about your spending.

Manage income from a second job

If you have a second job, opening a checking account dedicated to that work can help simplify your financial life. Keeping that job’s earnings and expenses separate will, for example, help you keep accurate records for tax time.

Safety First

If you have two checking accounts with different online banking logins, it may be tempting to use the same password, or similar passwords, so they’re easier to remember. But if one account becomes compromised, that makes it easier for cybercriminals to access your other account, too. So make sure to use a unique password for each account. Ideally, your password should be a random mix of capital and lowercase letters, numbers, and symbols.

Manage your joint account and personal account

If you’re married or living with a partner, you may decide to open a joint account to pay household bills and other joint expenses. But you might also want to open your own checking account for discretionary spending. That way, if you want to buy some pricey shoes, sporting equipment, or art supplies, you can do so guilt-free.

Separate personal finances from business

If you run your own business, it’s helpful to keep your personal and business finances separate. If you have a side business (or any business), ask your bank or credit union about opening a business checking account. That way, you can more clearly track your business earnings and expenses. It may even save you headaches at tax time. The IRS may disapprove of business expenses that were paid from your personal account, for example. And securing a business loan can be tricky if you don’t have a dedicated business account.

Maximize insurance coverage

You want to know that your money is safe, even if your financial institution should fail. Happily, accounts at federally insured credit unions are safeguarded by the NCUA, up to $250,000. Likewise, accounts at banks are insured by the FDIC, up to $250,000.
 
If you diversify your accounts, you can maximize your coverage. Let’s say you have a personal checking account with $300,000 in it. If your bank fails, $250,000 will be protected, but the rest ​​— $50,000 — will not.
 
One option would be to open checking accounts at two different financial institutions, and split that $300,000 up — perhaps put $200,000 in one account and $100,000 in the other. Then each account’s full balance will be covered up to $250,000.
 
While there are benefits to having more than one checking account, doing so requires more monitoring. You’ll need to keep track of the balances of each account to ensure that you maintain the minimum balance. Also, keep in mind that you may need to pay more fees.