Many people have at least a checking and a savings account, but how many bank accounts you “should” have depends on your family situation and employment (and how much you can handle).
Number of bank accounts based on situation
Here’s how many bank accounts you may need based on your situation, family and employment.
1. Three accounts if you’re single and employed
In general, if you have a job and have bills to pay, you may not need more than three bank accounts. For a single, employed person, this minimalist approach is often considered standard. Having three bank accounts isn’t likely to be overcomplicated or difficult to manage, and it offers a simple way to separate funds.
- Checking account for a debit card for purchases, paying bills and receiving income.
- Savings account for everyday savings, emergencies and rainy day funds.
- Retirement account or an employer-sponsored 401(k) to save for retirement.
2. Four or more accounts if you’re married and employed
How you manage your finances with another person is up to you. However, it’s common for married and unmarried couples alike to have a joint account to pay for shared expenses.
Additionally, it may be a good idea for you each to have individual accounts for some separation to manage personal income and expenses. For example, if you want to purchase a gift for your spouse, you can do it with your personal checking account to avoid spoiling the surprise.
- Joint bank account for shared expenses, budgeting and transparency.
- Individual checking account for personal income and purchases.
- Savings account for everyday savings, emergencies and rainy day funds.
- Retirement savings to save for retirement, such as Roth IRA or 401(k).
3. Four accounts if you’re self-employed or a business owner
If you’re a freelancer, gig worker, own a business or just fall under the 1099 worker umbrella, having at least four accounts is probably the way to go.
The extra account, compared to someone with an employer, is for your business or freelance income. Since 1099 workers and business owners don’t have an employer to automatically deduct taxes, having a separate business account to track your income and expenses can not only provide some personal liability protection but can also make tax time easier. Additionally, applying for a business loan often requires having a business account.
- Business checking to separate your business income and expenses from your personal expenses.
- Checking account to pay bills and manage budget.
- Savings account for everyday savings or emergencies.
- Retirement savings to save for retirement, such as a Roth IRA.
4. Four or more accounts for parents
If you have kids, it’s a good idea to start setting funds aside for them. Whether the cash is for higher education, their first car or just some money they can accept once they’re adults, having a separate account for each kid can make planning for their future easier. You could also make your child a joint owner on the account so they can access the funds when they’re ready.
If you’re married and have kids, you may also have a joint account with your spouse, so that might bring your bank account total up to five or more at a minimum.
- Kid savings to save money for college or a head start for adulthood, such as a 529 savings account, UGMA or UTMA.
- Checking account for a debit card, paying bills and managing income.
- Savings account for everyday savings or emergencies.
- Retirement savings to save for retirement, such as Roth IRA or 401(k).
Additional bank accounts to consider
While having at least two bank accounts is pretty common, there are many other accounts besides checking and savings — and there are no restrictions on how many deposit accounts you can have. Here are some other bank accounts to consider:
- High-yield savings. Just like a regular savings account but with a higher rate, high-yield savings accounts are designed to grow your saved funds faster than traditional accounts.
- Certificates of deposit. Can be thought of as locked savings, a certificate of deposit (CD) is a savings account with a guaranteed interest rate during its term if you don’t close it before maturity.
- Investment accounts. Investment accounts outside of a typical Roth IRA or 401(k) might be up your alley, such as a brokerage account that could grow idle cash.
- Money market accounts. Often linked to brokerage accounts, money market accounts are deposit accounts that often earn interest on your uninvested funds.
Bottom line
Ultimately, the number of bank accounts you have depends on what you can realistically afford and manage. If having more than a checking and savings account feels like things might slip through the cracks, then don’t fix what isn’t broken. However, we will say that if you don’t have a retirement account, like a 401(k) or Roth IRA, that’s definitely something to consider adding to your list of accounts.
