In a world of online shopping and mobile banking, it’s surprising to learn that there are people who don’t have bank accounts, but it’s true. A 2017 survey by the Federal Deposit Insurance Corporation found that 25% of households are either unbanked or underbanked. The latter is defined as having an account but uses financial services outside of banks. If you’re in the same situation, you’re in the right place.
Here are three reasons you should get a second high-interest checking account or savings account:
1. Build Your Savings Faster
The most common reason to have a bank account is to store money in a secure location. With banks, you can access your money from virtually anywhere in the world. It also makes online shopping possible. You can order anything you want without leaving your house. The bad thing is that the convenience also encourages spending. Instead of a hefty rainy day fund, you’re left with pennies after a few sales. A poll has discovered that more than half of Americans can’t pay for a $1,000 emergency with their savings.
You can help curb your spending with an additional account. This way you’re setting a divide between your money. One is for savings, while the other is for expenses. Ideally, you should use a savings account for the former and a checking account for the latter. Checking accounts offer benefits the more you use it, so it’s better suited for payments. As you pay for your bills with your checking account, the more your savings account will grow with interest.
2. Budget Better
People typically save up money for various reasons. Some have funds set aside for retirement while others save up for vacation. Multiple accounts can help you achieve your financial goals. For example, you’re aiming to buy a new car. You should open another account solely for the vehicle. Every payday, you can transfer a set amount to the account. It can help you compartmentalize so you’ll avoid dipping in your life savings. It can also help you track your progress, so you’ll know how much you need to achieve your target and when you’ll reach it.
An extra account can also help you track your expenses better. You can see the areas where you should cut back. You’ll follow your budget better and spend more efficiently.
3. Get More Benefits
Different banks offer different benefits. If you’re a frequent traveler, an account that earns miles might be a good fit for you. If a new bank has opened near your home, an account there could benefit you. When you’re in need of cash, you can avoid ATM operator fees and withdraw quickly since it’s nearby. Trying out different banks can also help you decide which is better for you in the long run. You can enjoy the best of both worlds with a second account.
As the old saying goes, “don’t put your eggs in one basket”. Open another account and let your savings grow. It will help you manage your money better, reach your financial goals faster, and save more in the long run.