Five Reasons Why You Should Have More Than One Bank Account
October 11 2017 Posted by Colleen Macdonnell, AMP
In today's tech world, being victimized by hackers can leave you penniless if you have only one bank account. The following five situations demonstrate how a having a backup account can keep you safe financially - and help you budget, too.
Accessing accounts using a phone can be very convenient, but mobile banking also leaves you more vulnerable to fraud and identity theft. By opening a side account not connected to your gadgets, you can prevent hackers from accessing all of your funds.
Better Allocation of Funds
Holding two or more accounts with specific purposes will help you organize your finances. You could use one account to pay monthly bills, while utilizing a second account for primary savings, and having a third serve as a vacation fund.
Increased Awareness of Spending
It's easy to lose track of finances when you're paying bar tabs from the same source you write mortgage checks from. Adding a new account specific for leisure activities can open your eyes to how much you're really spending at restaurants.
A Secondary Account Promotes Savings
The main goal of a primary checking account is to cover regular expenses. By pooling all money into one source, you're subconsciously setting yourself up to live paycheck-to-paycheck. Starting a savings account will likely motivate you to spend less and siphon more of your disposable income into the bank.
Emergency Cash Reserve
Many financial institutions link multiple accounts at the request of their depositors. This can come in handy if funds fall short in a checking account, thus avoiding the hassles of a declined debit card or overdraft fee.
Easier access to your finances with electronic banking has also given hackers new ways to commit fraud and identity theft. By diversifying your savings into two or more accounts, you can reduce the risk of losses while also promoting better budgeting habits.