Why Have Multiple Bank Accounts?

Having multiple bank accounts is a great way to help manage you money. When I was younger and working my first job, I developed a method of using various envelopes for my savings. Every week when I cashed my paycheck, I would divide the money into different categories. I had an envelope for each thing I wanted to devote money to such as one for savings, another for a new computer, one for the car, etc. By separating the money in this manner, I was able to save for my major purchases, save for myself, and ensure that money for one item was not accidentally spent on something frivolous.

Envelopes Then, Bank Accounts Now

Now that I am older, I still use this method. Only now, I use bank accounts with high interest rates to hold my money instead of envelopes in my safe. Creating separate bank accounts for yourself will keep you money from slipping through your fingers. You could have one for you emergency savings, one for your future investments, and another for your everyday money. While you may think that managing all of these accounts is a hassle, I use Quicken 2005 to keep track of everything. It allows you to input many bank accounts and track the comings and goings of your money with ease.

It is not important to have instant access to the accounts with the exception of the emergency savings, which is debatable, and your everyday money. The more effort it takes to access this money, the less likely you will be to use it for anything other than its intended purpose.

Bank Accounts With ING Direct

I use ING Direct for my "envelope accounts". Their interface makes it possible for you to open multiple accounts under a single customer number and pin. This eliminates the hassle of using multiple account numbers and pins to achieve the same purpose. You will not need a lot of money to open accounts with them. In fact, ING Direct has no minimums and no fees so I was able to open one of my accounts with $5.00. At the time this article was written, ING offered 3.15% annual percentage yield on their Orange Accounts.