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

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You may have a handful of bank accounts and think that it’s a lot, but have you met someone with more than 20? Meet James Royal, Bankrate’s investing and wealth management reporter who has about two dozen of them.

Naturally, you’re probably wondering why so many?

“It’s all part of an investing strategy that I explain in my book ‘The Zen of Thrift Conversions.’” says Royal. “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 nonetheless, there’s certainly a lot we can learn from Royal on how to manage multiple accounts. Here’s how he keeps everything straight and safe.

1. Track everything in a spreadsheet

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

“You have to be business-like about it.” says Royal. “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 — which is something he personally prefers to avoid.

2. Create unique passwords for every account

Royal is very serious about his financial security — as we all should be — and makes it a point to not be a username or password repeater.

By having a diverse collection of usernames and passwords, it makes hacking into one (or all) of your accounts more difficult for fraudsters. Having the same username and password across all of your accounts is a risky move as it makes fraudsters’ jobs easy peasy.

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

These passwords can be hard to remember, but don’t opt for the “remember password” feature on your browser. Instead, utilize a reputable password manager, like LastPass. These password managers are coded in a way that reduces your risk against potential hackers.

Additionally, engaging two-factor authentication on your financial accounts is another smart move in protecting your personal information.

3. Keep all accounts active

The point of Royal having so many bank accounts is because it’s a part of his focused investment strategy. But this strategy doesn’t work by simply owning so many accounts… you actually have to be an active user of all of them so they’re not considered abandoned, which is no small task.

This can be done with automated transfers, but 20 bank accounts is still a lot for the average person to handle.

“For most individuals, one or two accounts is probably enough.” says Royal. “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

The final tip Royal had to offer was to focus on minimizing transfer fees between your accounts. These fees can add up, defeating the whole purpose of having multiple accounts.

You can avoid these pesky fees by looking at banks that offer no-fee accounts.

The dangers of having too many accounts

There are many perks of having multiple accounts, like separating your goals and managing spending, but it’s also not a one-size-fits-all strategy and it’s perfectly okay if you prefer to keep it simple.

If you are considering opening multiple accounts, you should consider the following:

  • 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

The bottom line is that you have to be honest with yourself on whether you can juggle multiple accounts as it takes serious, business-like management, as Royal explained.

The good news is that opening and closing any type of checking or savings account will not affect your credit score as they are developed solely from the information that appears on a consumer credit report, like your history of credit cards and loans, according to Experian. 

Instead, banks may run a ChexSystems report, which shows banks a potential customer’s past deposits activity. This includes things such as unpaid negative balances, frequent overdraft fees, bounced checks and suspected fraud. Similar to credit reports, you can get a free ChexSystems report once a 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. Both of which can outweigh your earnings, ultimately defeating the purpose of having various accounts.

Bottom line

This is not your average investment strategy and it takes a lot more work than most of us are willing to put in, but it’s a strategy that’s proven successful for Royal and a major part of that is thanks to his keen money management skills.

And while spreadsheets may not be for everyone, the good news is that there’s plenty of digital offerings for money management out there whether it’s from your bank or an app. All you have to do is decide which one is your preferred strategy.

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Written by
Liz Hund
Creative producer
Liz Hund is a social producer at Bankrate and occasionally writes special features on-site with a social-first angle. Her writing has been featured on MSN, Business Insider and in various local publications.
Edited by
Senior wealth editor