How many bank accounts do I need?

It's common to have a few bank accounts that each serve a different purpose. Here's how you may benefit from having multiple bank accounts and the traps to avoid.

Is just one bank account enough these days? This completely depends on your personal situation, your preferences and how you like to manage your money, of course. Here we go through the reasons why you might need more than one and what to watch out for.

How many bank accounts do I need?

At a minimum, it’s a good idea to have one current account for everyday expenses and perhaps a separate savings account to earn interest on any savings.

But there are numerous other types of bank accounts you might want to open as well, depending on your situation, such as a joint account, an offset mortgage account or a business bank account.

Why you might have more than one bank account

Here are a few examples of when you might need to have more than one bank account:

  • If you want to split up your spending into different buckets, such as bills and personal spending.
  • If you have shared expenses with another person as well as your own personal expenses.
  • If you have a business or side hustle and you want to split up your personal and business income.

Benefits of having multiple bank accounts

  • Manage your spending. Having different bank accounts for different purposes might help you budget and manage your spending. For example, you could have one account for rent and bills and another for daily purchases like coffee, groceries and eating out.
  • Access different perks and offers. Different bank accounts offer different perks. You might have a bank account that charges no international transaction fees which you use for travelling and online shopping from overseas sites. You could have another account that offers cashback on your daily transactions which you use for your general spending, to take advantage of this offer.
  • Access a more competitive savings rate. Savings accounts with good bonus interest rates will often require you to open a linked current account with them. This is an easy way to earn more bonus interest on your savings.
  • Split up large balances. If you’ve got a large balance, you can split it up between different banks to ensure it’s all protected under the Financial Services Compensation Scheme (FSCS). This scheme ensures your deposit up to £85,000 with a UK bank is guaranteed by the government. So if you’ve got more than this, splitting it up across more than one bank ensures it’s all covered.
  • Manage shared expenses more effectively. Opening a joint bank account that’s separate to your personal account is a great way to manage expenses that you share with someone else. For example rent and bills that you split with a partner or roommate.

Traps to watch out for if you have several bank accounts

  • Look out for extra fees. Some bank accounts charge account-keeping fees if you don’t deposit money each month. If you only deposit money into one bank account but you want to open another account for different spending, check that it doesn’t have an ongoing deposit requirement.
  • Juggling multiple accounts can be more confusing. You might find that juggling several different accounts is more stressful and that you’re losing track of your spending. A good tip to manage this is to keep your accounts with the same bank so you can see them all side-by-side in your mobile banking app.
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