Episode 133: There are many reasons to have multiple bank accounts. Discover the pros and cons of creating multiple savings accounts and how you can use the envelope system to reach your goal on this episode in the Where Our Money Went series with guest host, Cassie Micheal.
The Benefits of Using Multiple Savings Accounts
There are a lot of people who start budgeting for various items but make a classic mistake: leaving it all in one account. One of the best things you can do to become financially independent and plan your spending is to use multiple bank accounts.
In the modern world, there are a lot of options for creating several bank accounts where you can sort your various expenses and savings into. You can even set up triggers so that when money enters the bank, it’s automatically allocated.
Having separate accounts allows you to get a better idea of your overall spending and be more mindful of transferring money from one account to another, similar to the cash envelope system that many budgeters swear by.
Savings Account Considerations
Look for a savings account that offers at least 1% interest, especially when saving for larger goals, such as a family vacation or wedding. Don’t be afraid to leverage online banks or move your money around to accomplish your goal.
CIT Bank is an online-only bank that offers high-interest savings accounts. With online banks, you aren’t forced to pay for brick and mortar locations through lower interest rates. Be sure to look for loopholes. The CIT Bank, for example, requires a $100 per month minimum deposit to maintain a higher rate.