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How Many Checking Accounts Can I Have?
Your checking account is a fundamental tool that helps you manage your personal finances. It enables you to withdraw cash from an ATM, pay living expenses—rent, mortgage, utilities and the like—and have money readily available with the stroke of a pen on a check or the click of a button with online banking.
So, if one checking account is good, is two checking accounts better? How many checking accounts can you have, and how many accounts should you have? In this article, we'll explore the circumstances in which opening a second checking account may be beneficial and how your checking accounts can work together to improve money management.
Why would I need multiple checking accounts?
The decision about opening more than one checking account depends on your financial goals—and your ability to juggle multiple accounts without dropping the ball, as it were. There is no legal limit on how many checking or savings accounts a person can have. Here are some reasons that multiple checking accounts may be helpful.
Financial goals
Keeping a separate account can simplify your financial planning and the tracking of your goals. You could set up a second checking account to use for just one purpose, to help with your budgeting. Deposit only so much per month into that account for that one purpose and sweep any that's left into a savings account.
Keeping emergency funds separate
If money is flowing out of your checking account as fast as it's flowing in and you're struggling to build up a cash reserve to deal with the unexpected, a second checking account might make sense. By directly depositing a portion of your pay into a separate checking account, and then letting it accumulate, you can build financial resources that will someday come in handy. A savings account would serve the same purpose, but there are upsides to a second checking account: You don't have to take time to transfer funds from savings to checking. And you don't have to worry about limits your bank may have on the number of savings withdrawals during a billing cycle.
Separating business and personal expenses and income
Let's say you have a side gig that you manage as an independent contractor or freelancer, something that many Americans do. A separate checking account for business income and expenses would let you track those funds independently from your day job, giving you a clearer financial picture of your business and, not incidentally, making it easier to file your taxes. You wouldn't have to untangle the business from the personal.
Using a joint checking account for shared expenses
It's not uncommon for spouses or partners to each have a checking account while sharing a joint account for expenses they've agreed to split—groceries, utilities, streaming subscriptions, or the cable bill for example. That way, if one partner wants streaming services, they can pay for them out of their individual accounts.
What to consider before opening multiple checking accounts
When you're thinking about opening a second (or third) checking account, do some homework to make sure you're not surprised by fees and are getting the features and benefits you expect. Here are a few things to look for:
Account purpose
First, what are you hoping to gain by opening a second checking account? Having multiple bank accounts does complicate your life a bit. For example, you may need to keep track of which debit card to use for which purchases (business vs. personal, individual vs. joint).
Maintaining accounts
Do you have enough money to maintain both accounts without incurring monthly charges? In addition, consider whether to maintain the accounts at the same or separate financial institutions. And if you decide that opening a second checking account at a different institution is right for you, make sure you can transfer money easily from one to the other. Using services like Zelle® is one way of making transfers seamlessly.
Minimum balance requirements
If you're someone who tends to keep a lot of money in checking accounts, you may not have to worry about minimum balance requirements. But if you're living paycheck to paycheck, or close to it, and your balance tends to drop at the end of the month, look for banking options with no minimum balance requirements.
Interest rates and other perks
Some premium checking accounts earn interest. There may also be some perks, promos or offers associated with opening a second checking account at one financial institution. Similarly, you might open an additional account to obtain a sign-up bonus.
Account fees
You can incur fees for insufficient balances, paper checks, overdrafts and other services, so ask for a complete summary of fees associated with checking accounts.
Services and account features
Is that new checking account offering the features and benefits you want, such as online banking and conveniently placed ATMs? That's great, but don't assume that one checking account will come with all the features and none of the drawbacks of your current account or accounts.
Mobile banking
If you want your banking experience to be as on-the-go as you are, look for a secure and user-friendly digital app that lets you deposit checks, pay bills, transfer money between your accounts, send money to friends, and view your account information and activity from your smartphone or tablet. The TD Bank app offers all those features and more.
Early pay
When you get paid through direct deposit, your employer notifies the bank of an incoming deposit before it clears your account. TD Bank uses this information to deposit the funds into your account up to two business days earlier than your scheduled pay date. The TD Early Pay service is free. If you sign up for TD Alerts, you will be notified when the funds are available.
Overdraft relief
If you write a check from the wrong account, the payment could be returned from the vendor, in which case you would probably incur a fee. Or the bank might pay the vendor and your account will become overdrawn. This also could result in an overdraft fee from the bank, but you can avoid overdraft fees with overdraft protection.
By linking your checking account to another account at the same bank, your payment will be covered.
At TD Bank, we offer Overdraft Relief,1 which can help take away the stress of overdraft fees. If you overdraw your available account balance and your checking account is overdrawn by $50 or less, you're within TD's overdraft threshold and it won't charge you an overdraft fee.
If you're overdrawn by more than $50 at the end of the business day, TD's Grace Period2 gives you more time to fix the overdraft.
Checking accounts from TD Bank
An account loaded with perks
A checking account made for everyone
No checks and no overdraft fees or services
An ideal account with no minimum balance requirement
The essential account features you need to run your business
Rewards for your business deposits, TD Bank relationship and more