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How many bank accounts is too many?
That's a question I asked a couple of experts for a recent Bankrate.com story, "How many bank accounts do you need?" on this subject.
The answer: More than one or two checking and savings accounts is probably too many for most people, setting aside the complexities of joint accounts and specialty health, education or retirement savings accounts.
That answer might give rise to a follow-up question -- we reporter types really like follow-up questions -- which is, who is most guilty of having too many bank accounts? The answer, based, admittedly, on just one bit of anecdotal evidence: Bankers. Or more specifically, employees of institutions that offer savings, checking and other financial accounts.
The reason for this multiplicity of accounts is that employees of financial institutions who switch jobs are often expected to open up new accounts at their new employer. If you work in a bank or credit union, the thinking goes, you should have your accounts there, explains Gregory B. Meyer, community relations manager at Meriwest Credit Union in San Jose, Calif.
"That's endemic to people who work in banking that when you go to work someplace else, they want you to open up a checking account there, so your direct deposit can go in. So we have to change accounts. You might get settled and have all your payees lined up and everything set, and then you change jobs and you have to change banks,” he says.
The same sort of support-your-own philosophy appears to work in other industries as well. We all know insurance agents who have too many policies, chefs who overindulge in their own cooking, bloggers who read too many other people's blogs and so on. So perhaps it's no surprise that bankers tend to have more bank accounts.
It's nice that bank employees like their own products and, of course, banks might be excused for naturally wanting their own employees to open up more accounts, but does that enthusiasm mean the rest of us should open up more bank accounts, too?
I tend to think not, but what's your opinion?
@Paul. Thanks for the info. It's quite interesting. Indeed, these promotions for more accounts are likely to continue. Consumers need to remember that a promotion has to get paid for by someone one way or another.
Not to mention bloggers who comment on other people's blog posts. I'm guilty of that too!
Unfortunately, banks maintain that checking accounts are their primary seed for future relationships. As a former banker, we maintained profitability indexes on all customers and utilized special incentives to get customers to open checking accounts tied to promotional rates with the theory more accts lead to more relationships which lead to greater profitability. I am sure that is still the case now. Most folks need one account (or two if the finances are split) and a secondary acct for rentals or other auxiliary type of activity. Checking accounts also generate the lion share of the fees that banks generate outside of credit card activity. Unfortunately this activity is likely to continue.
Bloggers who read too many other people's blogs. LOL! Definitely a hazard of the job...