How to Use Multiple Bank Accounts to Save Money?

Last Update: December 29, 2021 • Banking •

While consolidating all of your finances within one bank may seem like an easy solution, you’ll find that many of its products often lag the competition.

And while dividing your bank accounts across multiple institutions may seem like a hassle at first, doing so will save you a lot of money over time.

If you’re interested in taking the plunge, we have all the tips you need to get started.

Our latest research has found a significant decrease in almost all banking products. The highest paying now are online bank CDs, although their rates are about 3 times less, because of the COVID. Before, we had great values like 2% to 3%. Now we can’t find accounts with over 1%.

ElitePersonalFinance monitors the process carefully and updates regularly. You can find our updates in our average bank interest rates 2022 study and our best high-yield accounts of 2022 study.

The main things to consider when we plan to invest our money are fees, interests, and safety. Let’s start with fees.

Bank Fees

Bank fees can wreak havoc on your finances. For checking accounts, the average monthly fee ranges from $7 to $10. And while this outflow only amounts to a cup of coffee or small lunch, on an annual basis, it adds up to $84 to $120 per year. If we extrapolate this over a 10-year period, you end up paying $840 to $1,200 in total costs. Keep in mind that is just one example. Your out-of-pocket costs increase even more if we factor in monthly maintenance fees, wire transfer fees, and the cost of ordering physical checks. But the cost will change significantly if we plan to open multiple accounts in different banks.

To save money, consider an online no-fee checking account. Hopefully, there are a lot of them.

As a great option, Ally Bank’s Interest Checking Account offers 0.10% interest on all balances below $15,000 and 0.25% for a balance over $15,000. The online bank is also a Federal Deposit Insurance Corporation member, so all balances are insured by the U.S. federal government up to $250,000.

Now let’s talk about their fees.

At Ally Bank, there are no fees for:

Bill payments.
Standard or expedited ACH transfers.
Overdraft transfers.
Incoming wire transfers.
Cashier’s checks.
Ally Bank standard checks.
Sending money electronically using the Zelle mobile app.
Monthly maintenance.

Ally Bank will also reimburse you $10 per month for ATM fees charged by external operators, and the company also offers 24/7 customer support so you can talk to a human at any time.

What About The Highest Paying Savings Accounts?

Like we have mentioned, the highest-paying accounts are online bank CDs. Although their rates have seriously been affected by the COVID, they remain the highest paying. You can find all of them on the links mentioned above.

Some of them are up to 1%, which is a relatively high value in 2022.

Another great thing about online bank products is that most of them have no monthly fees.

Are My Money Safe?

The short answer is yes. They are safe. As long as the institution is FDIC insured, you are good to go. Again in the studies that we have mentioned above, you can learn more about FDIC.

Does Opening a New Bank Account Affect My Credit Score?

In most instances, no.

When you become a new client with a bank, they often screen your financial history but don’t perform a hard credit pull. Most rely on soft credit pull, which doesn’t affect your credit score. However, you should ask the institution for this if you are unsure. If so, the process can shave anywhere from 5 to 25 points off your credit score.

Don’t confuse this with credit products. All banks and credit unions will perform a hard credit pull if you apply for a loan or a credit card.

Make a List of All Your Checking Account Transactions

Before opening your new checking account, make a list of all your financial transactions. This way, once your account is approved, you can have it up and running and fully functional right away.

You should make a list of:

All direct deposit accounts.
All bill or subscription payments, whether monthly or annually.
All transfers you make regularly.
All credit cards, linked to the new account.
All savings or external checking accounts, linked to the new account.

Moreover, people should also sign up for mobile banking and order checks.

Apply for Your New Account

After you complete step two, it’s time to open your new account. Once it’s approved, circle back to your checklist. Get your direct deposit, bill payment, and subscriptions, and add the account numbers to your new checking account.

We recommend you keep some funds in your old checking account for at least two weeks. While you’re in the process of making the switch, some bill payments may still be in limbo. Because of this, your best bet is to wait for at least two weeks before officially closing your old account.

Close Your Old Checking Account

Once you’ve completed all of the instructions above, now you’re ready for the final step: closing your old checking account. According to the Consumer Financial Protection Bureau (CFPB), if you want to close your account, you should call the bank or provide the account information in person. Moreover, once you’ve requested the closure, state law requires the institution to fulfill the instructions within a “reasonable amount of time.” In general, this translates to about two weeks. Last, the CFPB also recommends you get written confirmation that the account has been closed.

Conclusion

While dividing up your bank accounts may seem like a hassle at first, you’ll quickly realize the cost savings are more than worth the trouble. Whether it’s eliminating checking account fees or obtaining a higher yield or your saving balance, a tactical approach to where you keep your money goes a long way. With increased competition in the banking space, institutions are always looking to lure new customers. Sometimes it’s saving you money, other times it’s paying you more. By staying flexible, you can take advantage of these great offers when they arise. And best of all, there is little downside in the process.