Is it Bad to Have Too Many Bank Accounts?

Balancing your check book is harder when you have multiple accounts.

Though Bankrate.com states that having more than one or two checking and savings accounts might be overkill, some people still do it. It can make sense for some people, but you may have more negative consequences from doing this. Determine how many bank accounts you really need and try to avoid opening too many.

Bank Accounts and Your Credit

In general, having multiple bank accounts won't have a positive or negative effect on your credit, no matter how many accounts you have. Your credit score does not factor the amount of liquid assets you have. However, when you open a new bank account, you will see a small decrease in your credit score. Opening several new accounts at once will have a greater negative impact. Additionally, if you overdraw your accounts, the bank may report you to ChexSystems, which can make it difficult for you to open new accounts.

Increased Fees

Though fees vary based on the type of account you have, most banks charge fees with your account. You may face a monthly fee or ATM fees, for example. This is bad enough when you have just one bank account, but when you have multiple accounts, you pay these fees on all of your accounts. This can result in hundreds of dollars of charges over a year.

Banking Confusion

To maintain your finances, you have to keep meticulous records of your spending and earning. With your money in different accounts, you may become confused -- overspending on one account because you forgot to transfer money, for example. The fewer bank accounts you have to manage, the better.

When It's Smart

Despite the negatives associated with having multiple bank accounts, in some situations it's beneficial. Multiple bank accounts help you keep certain monies separate -- such as your business and personal finances or joint and separate accounts in a marriage. Additionally, if you keep more than the $250,000 that's insured by the FDIC in liquid accounts, you'll want to spread that over a few banks so that all of your money remains insured.

References

• Bankrate.com; Bankers Binge on Bank Accounts; Marcie Geffner; July 2010
• MyBankTracker: Is Having Multiple Bank Accounts Bad