How many bank accounts should you have? It's more than you think

A common rule in personal finance is to diversify your income, but that same theory can apply to your bank accounts.

Spreading out your money across different checking and savings accounts can mean you secure a good return on your cash, all while keeping your finances organized according to your different goals. Let's dig in.

For most people, one checking account is enough to cover everyday needs: receiving paychecks, paying bills and managing expenses. However, a second account can be helpful in specific situations, such as opening a joint account with a partner or family member or keeping business finances separate from personal spending.

What to look for in a checking account

• Minimum balance requirements: Some accounts require a minimum balance to avoid paying monthly maintenance fees. Make sure the minimum is manageable and that you're aware of any penalties for falling below it.
• Access to funds: Look for accounts that offer convenient access to your money, including a debit card, ATM availability, online banking and local branch access — especially if you regularly withdraw cash.
• Fees: In addition to maintenance fees, there may be other charges such as overdraft fees, non-sufficient funds (NSF) fees and foreign transaction fees. Choose a checking account with zero fees.

Savings accounts play an important role in your financial health but many people don't take full advantage of using more than one. Ideally, you should have at least two: one for emergency savings and another for future goals, like a vacation or a down payment on a home.

While traditional savings accounts are common, they typically offer little to no return on your money. Meanwhile, online high-yield savings accounts can offer APYs far above the national average. This makes them ideal for long-term savings, as your money can grow more effectively over time.

That said, it may still make sense to keep your emergency fund only in a traditional account for quicker access. Since high-yield accounts are usually online-only, transferring funds to your main checking account in an emergency, for example, could take a few days.

What to look for in a savings account

• Minimum balance requirements: Check if there's a minimum deposit to open the account or to maintain daily to avoid fees.
• Withdrawal limits: Some savings accounts only allow you to take out cash a maximum of six times per month.
• Fees: You can definitely find a no-fee savings account these days.

There are many reasons why having multiple bank accounts can be a good idea for you.

Separate finances from significant other

Couples or family members often benefit from a joint checking or savings account for shared expenses, like rent or groceries, while still maintaining personal accounts for privacy and individual spending.

Separate personal and business finances

If you freelance, own a small business or have a side hustle, having a separate business account can help you track income, expenses and taxes more clearly. It can also make budgeting and bookkeeping easier.

Goal-based savings

You may want to open separate accounts for measuring specific savings goals, like a vacation, wedding, home down payment or holiday gifts. This can make savings more organized and motivating. Some online banks even let you label each savings account with the intended goal.

Bank incentives

Many banks offer sign-up bonuses, referral rewards or cash-back perks. Opening accounts at different institutions allows you to benefit from various promotional offers and features that suit your financial habits.

Having multiple bank accounts can be of benefit to you, but we point out the drawbacks as well.

Having more than one bank account can be a smart financial move, but it takes some organization to avoid confusion or missed payments.

Label your accounts

One of the most important things you can do is clearly define the purpose of each account. For example, you can label one as you "emergency fund" and another for "everyday expenses." If your bank or budgeting app allows nicknaming, take advantage of the feature.

Automate transfers and payments

Another tip is to automate transfers and bill payments. Also, set up recurring transfers from your main checking account into your savings accounts. This way, you're saving consistently without having to think about it. You can also automate bills like rent or your monthly credit card payment, so they're paid out of the correct account on time.

Stay on top of your accounts

To stay on top of your balances and avoid overdraft fees or missed deposits, make it a habit to review your accounts regularly. You can use a budgeting app or a spreadsheet to track which account is for what, especially if you're juggling accounts across different banks.

Monarch is great if you're looking for an easy platform. Both the app and the website present information clearly and don't feel overly crowded. Honeydue is also great for couples looking to budget together, as you can view each other's bank accounts, credit cards, loans and investments, as well as any progress on shared goals.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every banking article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of banking products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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