I have 7 savings accounts — here’s why


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Saving money is an important step in any successful financial plan. But if you have all of your savings in one place, I’ve found it can be tough to keep track of your different savings goals and your progress toward achieving them.

Five years ago, I opened an online-only checking account and was surprised to see the option of having multiple savings accounts. I didn’t understand why I’d need more than one, but that changed as I built up enough cash flow to work toward several savings goals at once.

Since then, I’ve opened and closed several savings accounts as I’ve worked toward and achieved different savings goals, and I currently have seven for ongoing savings planning.

A different account for each savings goal

When I first started saving, my account was primarily earmarked for rainy days. If I had to fix the car or make an unexpected trip to the emergency room, I’d use my savings to avoid affecting my monthly budget.

But as my savings needs and goals have evolved, it made sense to have a separate account for each one. Here are the accounts I currently have open:

  • Emergency fund: This money is mainly kept in case of an emergency, but it’s also my primary overdraft protection. If my checking account is overdrawn, my bank automatically transfers enough from this account to bring my checking back to zero.
  • Vacation savings: I enjoy traveling and get a lot of my trip expenses covered by credit card rewards. But for ancillary costs like food and souvenirs, I save up between vacations to make sure I have enough.
  • Christmas savings: Nearly half of Americans have felt pressured to overspend during the holidays, according to a recent Bankrate survey. Even if you don’t, not planning for Christmas spending can result in unnecessary credit card debt. To avoid this, I save a set amount each month into a Christmas savings account, so I don’t need to worry.
  • Family fun savings: Spending time with my family is important to me, but not every activity is free. Since I don’t plan a trip to the aquarium or a basketball game far in advance, it’s not always easy to budget for it at the beginning of the month. Instead, I set aside a certain amount into my family fun savings account each month and use it when I need to.
  • Extracurricular activity savings: My son has reached the age where he’s starting to enjoy doing basketball and soccer camps at the local recreation center. The cost for these programs is low now, but I expect them to grow as he gets older. So I’ve started setting aside a little money here and there to make sure he can do the activities he wants.
  • Child savings accounts: I have two other savings accounts, each for one of my children. Every time they get money for their birthday, for Christmas or at the family Easter egg hunt, I put it here instead of a piggy bank. My bank currently offers a 2.00% APY, so it makes more sense to store it there than on their dresser.

In addition to these accounts, I’ve also set up savings accounts for other goals, including a down payment for a house, home renovations, and preparation for a new baby.

Why I have multiple savings accounts

It may seem like having multiple accounts to keep track of can make your money management more complicated. But in my experience, it does the opposite. It’s actually made things more straightforward and efficient. Here’s how.

1. It allows me to automate my savings

For each of my major savings goals, I set up an automatic transfer from my checking account to that specific savings account. While you can do the same thing if you have just one savings account, it can get messy trying to keep track of all of your separate transfers over time.

2. It helps me keep track of my progress

With all of your savings in one pot, it can be hard to know how much is earmarked for which goal. You can set up a separate tracking system in a spreadsheet or on paper, but you’d need to stay on top of it every time you make a deposit into or take a withdrawal from the account.

With separate savings accounts, I know exactly how much progress I’ve made with each savings goal with just a glance at my online account or budgeting software.

3. It increases my ability to withdraw cash

Savings and money market accounts typically only get six free withdrawals each month. If you take more, you may be charged a fee for each one.

With multiple savings accounts, I get six free withdrawals per account. So if I need to move money back and forth between checking and different savings accounts, I don’t have to worry much about exceeding my allotment.

Where to get multiple savings accounts

Several banks and credit unions allow you to open multiple savings accounts at a time. Online banks like Capital One, Ally and Discover allow you to open up multiple savings accounts without needing to call customer service or visit a local branch.

Traditional banks, however, may require an in-person application, or might not allow you to have more than one savings account at all. Check with your bank to find out what it allows. Some banks, for instance, may limit how many accounts you can have, while others give you free rein. Bankrate’s experts have reviewed top banks with savings accounts so that you can easily compare multiple financial institutions and apply securely online.

Should you have multiple savings accounts

While having several savings accounts has been helpful in planning my finances, it’s not for everyone. If you prefer simplicity or would feel stressed having to manage multiple accounts, it may be better to stick with just one account.

If you do this, however, it may be helpful to create a system that will  help you keep track of your different savings goals, so you can reach them more effectively.

And if you don’t have any problems holding multiple savings accounts, consider opening a savings account with a bank that allows you to do so.

It can take some time to get used to, but in my experience it can make your savings planning a lot easier.

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