Banking convenience may come at price

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Dear Dr. Don,
Is it best to use one financial institution for all my financial matters? For example, my checking and savings accounts are with one bank and my mortgage and car loan are with another.

Also, is it best to only have one checking or savings account? Right now, many banks are offering great rates on combined accounts, but I am hesitant to completely close my current checking/savings.

Lory Laughter

Dear Lory,
Cautious consumers like the idea of keeping checking and savings accounts at a bank that is separate from the institution where they got their mortgage. They don’t like the lender being able to view what’s going on in the deposit accounts. I don’t see this as a major concern.

The biggest issue in having multiple checking and savings accounts is if the bank does what’s known as a “hard pull” on your credit report when you open the account. That would impact your credit score like a loan application, even though you’re opening a deposit account.

You also have a consumer banking report that tracks your banking history much like a credit report tracks your payment history on credit accounts and loans. ChexSystems is the most widely know of the consumer banking reports.

If you avoid bounced checks, having multiple accounts won’t be a problem. And don’t worry about closing a checking or savings account — it doesn’t carry the negative repercussions that closing a credit card can have on a credit score. The Bankrate feature “Chexsystems” explains the basics of this account-tracking network.

Consumers like one-stop financial services for the convenience they offer in managing household finances. Because it’s very unlikely that one financial institution will provide the best price or yield on all your investments or loans, you wind up paying a price for that convenience. But if you’re finding great rates on combined accounts, take advantage of those combined accounts.

To ask a question of Dr. Don, go to the “Ask the Experts” page, and select one of these topics: “Financing a home,” “Saving & investing” or ” money.”