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4 tips for managing multiple bank accounts from a wealth expert with more than 20 of them

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It’s not uncommon for someone to have several bank accounts, but have you met someone with more than 20? James Royal, Bankrate’s investing and wealth management reporter, has about two dozen of them.

“It’s all part of an investing strategy that I explain in my book, ‘The Zen of Thrift Conversions,’” Royal says. “The gist of the strategy is that by being a depositor at the bank you get to take advantage of the bank’s future IPO [initial public offering], and these IPOs have a record of being lucrative for investors and then being acquired at a substantial premium.”

This unconventional investment strategy likely isn’t for the average investor, but there’s certainly a lot to be learned from Royal on how to manage multiple accounts.

1. Track everything in a spreadsheet

Royal keeps things old fashioned and manually tracks everything — balances, interest rates, prospective earnings — in a spreadsheet.

“You have to be businesslike about it.” Royal says. “I track all the login information, feed the accounts with deposits, log in and check on the accounts from time to time. If you’re using this strategy extensively, you need to really manage it and be on top of things, so a spreadsheet is a great tool to give you that perspective.”

Not only does the spreadsheet method help Royal centrally track everything, but it also helps him avoid putting his financial information online — something he prefers to avoid.

A basic spreadsheet setup might look something like:

Account Login Rate Deposits Earnings Balance
Account 1
Account 2
Account 3

2. Create unique passwords for every account

Royal is serious about his financial security and avoids repeating usernames or passwords.

By using different usernames and passwords, it’s more difficult for hackers to get into your accounts. If the same username and password is used across all accounts, and one account is hacked, then it’s easy for the hacker to get into the other accounts, too.

When it comes to creating a unique password, use a random assortment of upper and lower case letters, numbers and symbols so that your password is harder to guess.

Instead of opting for the remember password feature on your browser, utilize a reputable password manager, like LastPass. These password managers are encrypted to reduce the risk of getting hacked.

Additionally, engaging two-factor authentication on your financial accounts adds another layer of protection to personal information.

3. Keep all accounts active

Royal’s point in having so many bank accounts is part of a focused investment strategy. Simply owning the accounts isn’t enough to make a profit off of them, though. The accounts need to be kept active so they’re not considered abandoned, which can be accomplished with automated transfers. But 20 bank accounts is still a lot for the average consumer to handle.

“For most individuals, one or two accounts is probably enough.” Royal says. “Each use [bank account] has its place and I don’t limit myself to a number, but rather just try to find the best deal if I’m looking to maximize earnings in a bank account.”

4. Minimize transfer fees

It’s also key to focus on minimizing transfer fees between your accounts, Royal says. As you move money between accounts to keep them active or get the best rates, transfer fees can add up and eat into earnings.

Avoid these fees by looking at banks with fee-free checking accounts. Online savings accounts also frequently have fewer fees with higher rates.

The dangers of having too many accounts

Having multiple accounts offers several perks, like separating spending money and savings, but it’s also not a one-size-fits-all strategy.

Some possible hurdles to consider before opening multiple accounts are:

  • The time required in managing multiple accounts
  • Monthly service and minimum balance fees
  • The potential to overlook and miss fraudulent activity, overcharges or double charges
  • Be honest about whether you can juggle multiple accounts as it takes serious, business-like management, as Royal discipline.

The good news is that opening or closing a checking or savings account has no effect on your credit report and won’t affect your credit score.

Instead, banks may run a ChexSystems report, which shows banks a potential customer’s past deposits activity. Activity that could negatively affect a ChexSystems report includes unpaid negative balances, frequent overdraft fees, bounced checks and suspected fraud. Similar to credit reports, everyone has access to one free ChexSystems report each year on the reporting agency’s website.

The main things to watch out for when having multiple accounts are pesky fees and/or fraudulent charges, which can outweigh earnings and ultimately defeat the purpose of having multiple accounts.

Bottom line

Though having multiple accounts has proven successful for Royal, it takes a lot more work than most of us are willing to put in — and it wouldn’t be possible without keen money management skills.

Spreadsheets aren’t for everyone, but fortunately there are numerous budgeting and investing apps that simplify managing your money, helping you to master your own finances.

–Staff writer Liz Hund contributed to a previous version of this article.

Written by
René Bennett
Banking writer
René Bennett is a writer for Bankrate, reporting on banking products and personal finance.
Edited by
Wealth editor