How many bank accounts do you need?

Banking » How Many Bank Accounts Do You Need?

Are multiple accounts more secure?
Are multiple accounts more secure? © wongwean/

These days, it's hardly news to hear about a security breach at a financial institution or an instance of identity theft. But, in addition to taking the usual precautions, it may make sense to double up on the number of banks or credit unions you belong to, Johnson says.

"The average person only needs banking relationships with two financial institutions," Johnson says. "One institution should have your primary checking and savings accounts, and the other should serve as more of a backup or secondary institution. The account at your secondary institution should be available just in case you are temporarily unable to access your accounts at your primary institution."

But, while it's good to have a backup, consumers should remember that a secondary institution is only there for access in case of an emergency. Assuming the depositor has less than $250,000 in the account, the money is insured by the Federal Deposit Insurance Corp.

"From a liability perspective, you'll be made whole either way," says McCloskey, who adds that individuals with more than $250,000 should definitely look into using multiple financial institutions, or make sure that the ownership title on each account reflects a different depositor in order to qualify for FDIC coverage.


Show Bankrate's community sharing policy
          Connect with us

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

Ask Dr. Don

Are my savings bonds safe?

Dear Dr. Don, I have approximately $20,000 in savings bonds. Given the state of the U.S. economy, should I cash them in? How safe are they if the economy tanks, the U.S. goes bankrupt or the country gets a serious credit... Read more

Partner Center

Connect with us