How Many Bank Accounts Should You Have

Last Updated by Neiko Johnson on 
October 22, 2021
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Have you ever wondered how many bank accounts should you have?

It's a question that we don't think about often, and the answer differs depending on how old you are and how much money you make.

For example, if you're a student or your income is very low, it might be wise to invest in one savings account for emergencies.

However, if you're an adult with a fairly decent income and no dependents, two personal checking accounts could suffice.

In this article, we'll help break down how many bank accounts everyone should have based on their age and marital status!

Organizing Your Financial Goals To Match Your Bank Accounts

When you are trying to figure out how many bank accounts you should have, you must first make sure your financial goals are in order.

Money management skills are important to have before you even start earning money.

You have to create a financial plan to be organized so your money is spent wisely. Each bank account that you have should be designed to handle a specific financial goal.

For example, you might prefer to separate different financial goals into specific bank accounts such as:

- checking account (daily expenses)

- savings account (emergency fund and other short term saving plans)

- IRA or 401(k) (retirement planning)

Your paycheck should be deposited into your checking account and that's where you pay all of your bills from.

Ultimately, you have to have a clear understanding of what you are doing with your money by creating a detailed monthly budget.

This allows you to have control of your spending habits and expenses. At the end of the day, it's all about trial and error and doing what works best for you.

The Type Of Bank Accounts You Should Have

So, how many bank accounts should you have?

Well, there are many approaches for the number and types of bank accounts you can have.

It's all about understanding your financial goals and what fits best for you.

Below, we will go into detail to answer "how many bank account should you have?"

1. Checking Account

Joint Checking Account

If you are married, you should have a joint checking account. Joint checking accounts help reduce the number of money arguments a couple has.

Combining your money will help you and your spouse manage money together on the same page.

It's also helpful to have a joint checking account if you are planning for your future together or want to open up a business.

Having a joint checking account is all about mindset and understanding that everything you and your spouse have is yours together.

All income should be deposited into this account and all bills should be paid from this account.

Personal Checking Account

If you're single, it might be best to stick with one personal checking account until the time comes where you would like another bank account.

Also, we believe that even if you are married you should have your own personal checking account where you have your own spending money.

This account should be controlled only by you and your spouse should have one too.

You should both agree on the amount of money each person receives each month to spend however they want and the other person has no input on the spending.

For example, you can both agree that each person gets $500 a month to spend however they want. You can increase or decrease this amount as you'd like but remember it should be an amount that doesn't hurt your budget.

This gives each person a little freedom while you still work on managing your finances together using your joint checking account. This is very effective when considering how many bank accounts should you have.

Business Checking Account

It's very important to keep business and personal transactions separate if you run your own business.

This will help you manage your money more effectively and avoid having issues when tax season arrives.

When you operate your business and personal transactions from one bank account, it can be difficult to keep up with your receipts and expenses for your business.

2. Savings Account

It's important that every person should have a savings account regardless of how much they earn or how old they are.

Having an emergency fund is crucial for everyone and it can also help motivate you to save more money by having this goal in mind!

Make sure to set up an automatic transfer each month from your checking account into this savings account. This will create a good savings habit for you to continue in the future.

How To Manage Your Savings Account

It's important that you are able to access the money in your emergency fund without penalty if needed but it shouldn't be used for daily expenses or other short-term goals unless necessary.

You should only use your emergency fund for emergencies. Buying a new TV because it's on sale is not an emergency.

Open a high-yield savings account to keep your emergency fund separate from your checking account.

CIT Bank is a great option and offers competitive interest rates. This is our recommended high-yield savings account.

3. Retirement Investment Accounts

It's important to have retirement accounts the same way you have bank accounts. You should consult an investment professional to make sure you are making good choices for retirement.

Retirement investment accounts are focused on long-term savings so you can have money when you reach retirement age.

Let's talk about the main 3 types of retirement investment accounts.


If your employer offers a 401(k), you should absolutely be taking advantage of this benefit.

Not only does it help you save for retirement now but some companies will offer matching contributions, which is free money!

Make sure to contribute the maximum amount each year so that you can take full advantage of the match and increase how much you save for retirement.

Individual Retirement Account (IRA)

Individual retirement accounts (IRAs) are a great way to save for retirement. You can open one in your name or your spouse's name or both if you're married.

You can also contribute to an IRA even if you don't have a job, which is nice because it gives everyone the chance to get started on saving for retirement.

The best thing about IRAs, though, is how easy they are to set up and how tax-free they are when withdrawals are made during retirement.

401(k) vs IRA: Which Retirement Account Should You Choose?

An IRA and a 401(k) are both great options but how do you choose between the two?

You should always contribute to your employer's provided plan if it offers matching contributions. If not, then we recommend opening an individual or spousal IRA.

One of the main differences between an IRA and a 401(k) is how much you are able to contribute each year, which can make or break your long-term savings goals!

IRA - You are allowed to contribute up to $5000 if under 50 years old per tax year. If you're over 50 then this amount increases to $6000.

401(k) - You can contribute up to $19,500 per year in 2019 and this amount goes up each year with inflation. This contribution limit is known as the "elective deferral". Comparing how much you can save for retirement between an IRA vs 401(k) will help you make your decision!

Once you turn 70, the IRS requires that you start to take minimum distributions from your retirement investment accounts.

This can make it difficult to manage how much money is accessible for emergencies if all of your retirement savings are in one place. This is why we recommend having multiple bank accounts and investments outside of this account!

403(b) or 457(b)

A 403(b) plan is a typical retirement plan for those who work for organizations that are tax-exempt, such as non-profits, public schools, or even church ministers. Teachers, school administrators, nurses, doctors, government employees, and academics are all eligible for this plan.

A 457(b) is a type of retirement plan for state and local government workers, such as police officers and firefighters. The investment alternatives of choice under this strategy are mutual funds and annuities.

4. College Savings – 529 Plan / Education Savings Account (ESA)

If you have children, a 529 plan is ideal for putting money away for their education. 529 plans are designed to help save money for kids from kindergarten through college and beyond. These funds can be used to pay for books, tuition, room and board, and school supplies once your kid reaches college age. The major advantages of the 529 plan are how it grows tax-free and how you can use the money for private or public schools without penalty.

An ESA is a savings account that was designed to help parents save for their child's education. They're especially beneficial if your kid has special needs as they allow up to $500 per year, per child towards therapy expenses!

An ESA is also similar to a 529 plan because the money grows tax-free and how it can be used for public school tuition without penalty. One difference between an ESA vs 529 plan, however, is how much you are allowed to contribute each year which makes the ESA less beneficial in some cases!

If your kid decides not to go to college, you can always withdraw the money you contributed from an ESA without penalty!

Final Words - How Many Bank Accounts Should You Have

The most important thing to keep in mind is how many bank accounts should you have. It's a good idea to have one checking account and one savings account at the very least, but if you're married it would be wise to also open two personal checking accounts as well as a joint savings account.

You'll want an individual retirement account (IRA) for your own contributions that will allow tax-free withdrawals during retirement and a 401(k) or 403(b) if offered by your employer with matching contributions.

How many bank accounts do you currently have?

Article written by Neiko Johnson
Neiko is a personal finance expert and Co-founder of Secret to Finance. Along with his wife Alexis, they learned how to get out of debt and paid off $400,000 in 4 years.

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