When you want to securely store your money, you can choose to open one or more savings accounts at the bank. If you’re unsure how many accounts to open, it’s a good idea to keep the advantages and disadvantages of having multiple savings accounts in mind before making a decision.
Pro: Meeting your financial goals
If you have clear financial goals that you want to meet, Ellen Chang, contributor to U.S. News & World Report, says that having a set account for each goal can provide the motivation to save more. You may have different accounts dedicated to emergency situations, vacations, car payments and other objectives. By having these different accounts, you can more easily check your progress toward each objective, according to Justin Pritchard, writer for The Balance. In addition, Pritchard says you can better budget for monthly and annual expenses when these have their own accounts.
As Pritchard also notes, you may feel more upset taking money out of a savings account that’s devoted to a goal you deeply care about, and this may stop you from buying unnecessary expenses. Meanwhile, if you are joyful seeing your balance increase over time, you may have positive reinforcement to keep saving money for a specific account.
Con: Keeping track of your accounts
One downfall of having multiple accounts is that it can be difficult to keep track of them all and to remember which account is for which savings goal. Having said that, there are a few tricks you can use to keep them hassle free and organized.
- Have a portion of your paycheck directly deposited into each account. This usually can be set up with your HR department, however they may limit the number of accounts they can deposit into.
- Set up an automatic transfer. If direct deposit isn’t an option, you can set up an automatic transfer to move the funds from one account to another on whatever day you choose. The benefit of this is you don’t have to remember to transfer the funds later, it’s done automatically for you.
- Label your accounts. Within Waukesha State Bank’s VaultLink Online Banking platform, you can also add a “nickname” to your accounts. This lets you label the account in a way that you’ll know what it should be used for, such as “vacation,” “house downpayment,” “school expenses,” etc. That way you won’t get confused as to which account to use when you need the funds.
If you’re unsure whether to have one or several savings accounts, speak with one of our Personal Bankers to discuss which options are right for your specific situation. Our bankers are always here to help!