You might ask yourself, “Should I have multiple bank accounts?”
I’d say, yep.
Well, banks can go under.
Most recently, as of writing this post, ask SVB.
But that won’t happen to you.
You’ve got FDIC insurance, of course!
You have $5,000,000 and want to ensure that FDIC insurance covers all your funds.
You can technically do this.
In this scenario, you’d need 20 different bank accounts since each one is only covered up to $250k by the FDIC.
What a nightmare.
However, many banks have recently increased their protections.
They do this by sweeping your funds across multiple accounts.
One such bank (that I use) offers up to $5M of protection by partnering with multiple banks.
The company is Wealthfront (more on them later).
OK, so this is a good reason.
But it’s not why I have multiple accounts.
Then why have multiple accounts?
For the deals!
Seriously, the bonus offers and promo deals.
Because each bank serves a different purpose for me.
I’ll explain and share who I work with and why.
First, I have an account with a big, boring bank.
This should be a top bank in the U.S.
It’s like a big box bank.
They won’t have the best deals, but they’re large and stable (well, mostly).
I’d recommend a top 20 bank.
I have an account with PNC Bank.
They get the job done.
They CONNECT to all of my other accounts.
This is the key.
They are the hub, and all other banks with benefits are the spokes.
OK, so who’s next?
Should I Have Multiple Financial Accounts? Yep, Savings Accounts
Well, they’re who I use for a savings account.
Because they offer the highest rate I’ve ever seen for a savings account, and I can quickly transfer money to them.
Want to read up more on them?
I wrote about my Wealthfront experience here.
OK, we’ve got our hub bank and the first spoke — a savings account.
So, what other banks do I use?
Local Credit Unions
Credit unions are AMAZING for two things.
Auto loans and home loans.
Absolutely the best rates on both.
The main reason is that credit unions aren’t created as for-profit entities.
By default, they’re non-profit.
Their goal isn’t to maximize shareholders’ return and make wise loans in their community.
Because of how they’re set up, they have the best interest rates out there.
I have done two different home loans (HELOC), where I paid ZERO out of pocket for the loan.
No loan costs.
No origination fee.
The only thing I paid for was the appraisal.
And then they reimbursed me on closing day! (They just wanted to confirm that I would get the loan so they didn’t come out of pocket for the expense).
I’ve now done this twice.
Read more about my experience using HELOCs as our primary home loan.
The key is to wait until a credit union has a special like this.
You have to ask.
You must be a credit union member and open an account with them.
I use the account to pay the loan.
I transfer funds from my hub bank as needed.
So we’ve got our hub bank, savings account, and the bank we’ll use for our auto and home loans.
Neobanks – Yep, When Asking, “Should I Have Multiple Bank Accounts”
We don’t use their debit card or ‘banking features,’ but we have accounts with each of them.
We want to easily accept payments from anyone who wants to send us money.
Maybe we are selling something, or someone owes us some money.
If they ask, “Do you have…Cash App? Venmo?”
Yes is the answer.
Here you go.
Pay me my money!
OK, what about business accounts?
I use PNC for the majority of our business needs, but…
There are some killer banks for business out there.
A solid bank like Novo is tech-savvy and easy to use.
[note: For things like real estate loans and business LOC’s, a relationship with a smaller bank can make the difference. The local bank president has more power in the decision-making process].
A few years ago, I also found Wise (used to be Transferwise).
I use it to pay all of my international team members.
The fees are the lowest in the industry for international payments.
They pay a high interest rate on our unused balance.
I am impressed by what Wise is doing.
Is that it?
Well, for the most part, yes.
I’ve been known to open an entire bank account for a bonus offer (I made $250 many years back from opening a Capital One account).
This is similar to what I often do with credit card offers!
If you need even more options, here’s an article with top banks that business owners can open.
It’s a great platform.
We also have accounts at places like Coinbase for crypto.
There are still places where you can get free crypto for signing up.
As well as Rally Rd (for buying cool collectibles).
Rally Road is awesome, and you can read about my experience there.
So, is it challenging to keep up with this many financial accounts?
Yes, it can be.
I save all of the data in LastPass.
My wife jokes that she won’t know what to do if I die.
I have an old-school sheet of paper with usernames and passwords in our home safe.
It will be a good start for her if she ever needs it.
OK, so should you have multiple bank accounts?
Yep, I think so.
It’s not that hard.
It’s just one of my finance thoughts (see my rules here!)
Today, they can be linked easily with a company like Plaid (most banks I’ve seen use Plaid to verify your credentials).
And if the idea of multiple bank accounts overwhelms you, start small.
Build over time.
See you at the bank!