6 Reasons To Spread Your Money Around Multiple Banks

 6 Reasons To Spread Your Money Around Multiple Banks

Andrew Lisa    Mon, March 20, 2023

Although you should always look for ways to declutter your financial life, it sometimes makes sense to have accounts scattered across more than one bank.

The following is a look at situations where you’d be wise to divide your money among two or more financial institutions simultaneously. If any of these scenarios apply to you, consider spreading your money around, even if it means keeping track of another routing number.

Banks Incentivize Bundled Services

Like insurance companies, banks offer better rates, deals and discounts for customers who partake in more than one of their offerings. In many cases, all you need is a free checking account to access the incentive that interests you.

“There are times when a bank may offer a special deal on a home equity line of credit for existing customers,” said 20-year lending industry veteran Eric Jeanette, president of Non-Prime Lenders. “In just that one example, you may miss out on an opportunity if you did not have an account with that bank.”

There are many other scenarios — including the pursuit of cheaper loans, higher savings yields or better CD rates — that could spur you to open a new account that you don’t really need.

“Some banks also have different fees for services like wire transfers or safe deposit boxes,” Jeanette said. “If you have a relationship with more than one bank, you have an opportunity to choose.”

Different Banks Excel at Different Things

Keeping all your accounts with one institution is convenient, but that’s not always what’s best for your money. For example, you might want a checking account that gives you early access to direct deposits and free peer-to-peer (P2P) transfers to friends at different banks. But the bank with the best savings rates might not offer those features to its checking customers.

In that scenario, the only way to get all of what you want is to join two banks, and that’s fine — decide where to stash your cash based on the merits of the account, not the institution that hosts it.

“One bank may provide higher interest rates on savings accounts, while another may offer superior credit card rewards programs,” said Andy Flynn, vice president of finance and treasury with a medical device company called SpryLyfe. “By maintaining accounts at many banks, you can maximize your financial status by taking advantage of various incentives.”

You Might Want To Establish a Hometown Branch If You Move

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