Jul 12, 2024
According to the FDIC, around 96% of U.S. households have money in a checking or savings account at a bank.
This isn’t surprising, given that checking accounts are essential for conducting basic financial transactions such as collecting a paycheck or paying bills.
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But how many checking accounts should you open, and is there such a thing as too many? The answer might surprise you.
You're allowed to have as many checking accounts as you want
Technically, there is no limit to the number of checking accounts you can hold. In fact, you can open multiple accounts with the same bank or have numerous accounts with different financial institutions. Multiple accounts won't hurt your credit score, and there are potential benefits associated with maintaining more than one checking account. For example:
You can stay below the FDIC-insured limits. The FDIC protects your banking deposits up to at least $250,000 at each eligible bank. If you have a large sum of money, you may want to spread it across multiple accounts to stay within these limits.
Multiple accounts can be more convenient. Multiple bank accounts may allow you to take advantage of different features or perks. For example, one bank may be closer to your house and easier to visit in person, while another may offer larger mobile deposits or no-fee banking.
You can maintain different accounts for different purposes. Separating personal and business checking accounts often makes sense if you're self-employed. Or, if you share finances with a partner, you may want to have both joint and separate bank accounts.
As you can see, multiple accounts aren't necessarily a problem and can sometimes be a good thing.
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But too many checking accounts can lead to big trouble
While there's no legal limit to the number of checking accounts you can open, having too many accounts could cause problems. Here's why.
You could get hit with monthly maintenance fees. Many checking accounts charge monthly maintenance fees if you don't maintain a certain minimum daily balance or have money directly deposited each month. If you have multiple accounts, it may be hard to meet all the fee waiver requirements, and you could spend a lot of money on bank fees.
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Overdrafts or bounced checks may be more likely. Spreading your money across too many accounts increases the risk of overdrawing your account or writing bad checks. This can lead to added fees, not to mention a negative account balance.
You could hurt your banking history. Overdrafts, bounced checks or negative balances could hurt your bank account history. ChexSystems maintains records of problems with bank accounts. These reports are similar to credit reports, and a poor record can make it harder to open accounts in the future.
Increased fraud risk. If you’re trying to keep track of several banking accounts, you may not notice when problems, such as fraud or identity theft, arise. The longer these issues go undetected, the more damage they can cause.
These drawbacks are worth considering when deciding how many accounts to keep open.
How many checking accounts should you have?
Ultimately, the right number of checking accounts for each person depends on their financial situation. However, as a general rule, you should make sure to:
- Avoid opening multiple accounts with fees
- Limit the number of bank accounts to what you can easily manage
- Only open a new checking account if you have a specific purpose in mind
Most people probably don’t need more than two or three checking accounts. However, if you have a good reason to open more, monitor them closely to avoid any problems that could impact your finances.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
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