One of the greatest benefits of having multiple accounts is that you can protect more of your money with federally guaranteed insurance on your savings.

The U.S. Federal Deposit Insurance Corporation (FDIC), an independent agency created by Congress, insures up to $250,000 in individual savings accounts. The coverage is offered per depositor, per account at FDIC-member banks. Similar coverage for credit unions is offered by the National Credit Union Administration (NCUA). What this means is that if you have more than $250,000 in one account, the remainder is potentially at risk if the bank were to ever fail.

Let’s say you have $400,000 saved away in one account, only a part of which will be FDIC-insured. Moving $150,000 to another account will mean that your entire savings are now protected.

Make sure to check if your bank or credit union is FDIC- or NCUA-insured before opening an account. (Hint: all of Raisin's partner banks and credit unions are federally insured.)

This is by far the most convincing argument for the case. 

Let’s say you have three savings objectives:

• Savings for tax dues

• Savings for an annual vacation 

• Savings for an emergency fund to meet accidental expenses

Having separate bank accounts for each of these goals will help you monitor your savings more closely. You can also break down individual goals and set monthly savings targets for each. This will help you know exactly what to set aside for each account at the beginning of every month.

Using a savings platform like Raisin allows you to open and manage savings accounts across an exclusive network of federally insured banks and credit unions all with a single login.

Diversifying your savings is a better approach than keeping all your money bundled up in one account and under one heading. There’s no way to keep track of progress against specific goals unless you keep detailed notes and calculations, which can be quite a cumbersome process. 

This is an advantage that comes with having accounts with multiple banks. 

Interest rates matter because they determine how fast your savings grow. But as rates rise and fall due to regulation or in response to market forces, different banks may end up offering slightly different interest rates for their customers.

For instance, a traditional bank with hundreds of branches across the country might offer a lower interest rate on your savings than one of the newer online-only banks. The same difference would apply between a certificate of deposit (CD) and a high-yield savings account.  

Having accounts in different banks means you can move your money around between them to avail the highest possible annual percentage yield (APY). If one bank drops its APY, just move your funds from there to one with a higher rate. The only thing to be mindful of in this strategy is making sure you don’t fall short of the minimum balance requirements that some savings accounts demand. 

Many banks offer a welcome bonus for every new account as part of a strategy to draw in new customers. Bonuses can vary from $100 to up to $500 per new account. There are likely to be a few strings attached - like a minimum number of qualifying transactions in the first couple of months or mandatory use of the bank’s app - but it yet might be worth it.

These bonuses can be pretty lucrative and are worth considering if you have the money to spread around and can comfortably meet the requirements. You can easily set aside the bonus amount towards one of your savings goals. Just make sure to go through the terms and conditions first to know if there are maintenance charges or other fees that could outweigh the bonus amount.

Just think about all the stuff you might have bought over the years that you probably didn’t need, or worse, couldn’t really afford at the time. Splurging on a trip to Vegas, getting a second big-screen TV, or that very expensive pair of Air Jordans  - all that might have felt great at the moment but were probably not sound decisions in hindsight.

Keeping your money divided makes it easier to avoid impulse buys and other spur-of-the-moment expenses that you might come to regret later. Automated clearing house transfers from one account to another can take up to three business days to process, which is enough time to overcome whatever temporary temptations might have beset you. The time and effort required to transfer the amount can be enough of a deterrent against extravagant spending.   

That is especially true if your accounts are spread out over different banks.

You need a reliable partner to get the most out of your savings.

Raisin is a trusted online savings marketplace that gives you access to competitive interest rates on a variety of products including high-yield savings accounts, money market accounts, and CDs. 

All banking products recommended on our platform are from federally insured banks and credit unions. Start saving better today!