People need at least one checking account and one savings account, but you can open as many checking accounts as you’d like. You might be curious if it’s worth your time to open another checking account. It’s helpful to match the number of checking accounts you have to your specific financial situation.
As the years go by, your financial goals will shift, your income may grow, and you’ll often incur more responsibilities. Opening a new checking account can equip you with higher levels of financial organization. Discover the benefits that this organization can bring to your financial situation with the information below.
Benefit #1: Spending Organization
Managing your money can feel like a lot of pressure. Separating your financial needs from your financial wants in two separate checking accounts can help you meet bills on time while treating yourself along the way. Conflating funds for needs and wants into one checking account can leave you with an overdraft fee if you enable auto-pay for bills and overlook spending part of your monthly bill money.
You can take this organizational ideology to the next level with one checking account for recurring bills, one checking account for everyday expenses like groceries, and a third checking account to address your wants.
Separating Your Emergency Funds
Unforeseen emergency costs are bound to come up in the coming years. You can prepare for these unfortunate and unanticipated instances by establishing an emergency-only checking account. Many people store three-to-six months worth of living expenses in their emergency-only account.
Keeping Your Business and Personal Finances Separate
Have you ever thought about having one checking account for your personal finances and another for your business? Perhaps you have thought about separating personal and business checking accounts but haven’t felt enough motivation to make the switch. Let’s generate that motivation right now.
A business checking account gives you a clearer view of how much you’re spending with the money you’re taking in and, when you look at spending, you’ll have an easier time identifying deductions. Having one checking account for your business and personal finances increases your likelihood of committing an error when filing a tax return since you have to sift through more information. The more straightforward your financial statements are, the less stress you’ll experience when reporting your income.
Business owners may occasionally find themselves in a situation where they have to apply for a loan. Having crystal-clear financial records through a separate business checking account makes it easier to apply for funding and simultaneously helps assemble your credit rating. At its most basic level, separating personal and business checking accounts demonstrates professionalism.
Benefit #2: Earn More Interest, Pay Lower Fees
Different types of checking accounts can supply you with various benefits. Interest-earning checking accounts tend to require a higher balance, but they can help you raise your earnings while keeping funds accessible. Suppose you open an interest checking account with your basic checking account. In that case, it’s helpful to use the basic account for monthly bills and restrict the interest-earning checking account to more minor expenses that help you maintain your balance.
Benefit #3: Better Family Finances
While joint checking accounts can bring a sense of togetherness, this dynamic isn’t ideal in every financial instance. Having a separate checking account from the joint checking account of you and your partner will help shield your partner from taking on any debt you may accrue, and it allows you to keep certain financial transactions private—such as that surprise anniversary gift.
Benefit #4: Smart FDIC Coverage Management
More than $250,000 in one checking account exceeds Federal Deposit Insurance Corporation (FDIC) coverage limits. You can protect your cash by spreading your money through different checking accounts at various financial institutions.
How Multiple Savings Accounts Compares to Multiple Checking
Similar to the number of checking accounts a person should have, the number of savings accounts someone owns should depend on their financial goals. Someone might open a savings account to fulfill a specific purpose, such as preparing for a down payment on a mortgage or saving for a yearly vacation.
You can have a savings account for each of your financial goals and a checking account for each of your spending needs. Having separate savings accounts that correlate to each of your financial goals makes it easier to track your progress—similar to the way you’d track your income and deductions for tax season in a business checking account.
The People’s Federal Credit Union (TPFCU) lets you open a savings account with a $25 deposit, while our Club Savings Account focuses on supporting specific savings initiatives like vacations and holidays. Our members can automatically deposit a certain amount of money each time they get paid to make consistent progress toward their Club Savings Account goals.
Open a Checking Account at TPFCU Today
Are you seeking a simpler way to open and manage your multiple checking accounts? TPFCU doesn’t require minimum checking balances and doesn’t send you service charges. It gets better. Our checking accounts pay quarterly dividends, we have overdraft protection up to $300, and you can utilize free automatic transfers from your savings to cover overdrafts without having to incur a fee.
Your money is always within arm’s reach, thanks to our network of 40,000 surcharge-free ATMs, CU@round online account access, and smartphone Owner App.
Checking account customization matters. Set spending limits on your new checking account, turn your debit card on and off, and more with our free CardValet app. Contact TPFCU at 806-359-8571 to open up your new checking account today.
