Why Saving Cash in Multiple Areas Can Be Good
Let’s get straight to the point. Bank accounts annoy me! Your money sits there and loses value by the day. I try to keep as little money in there as possible. At first I started with one online savings account for emergencies. Then I opened up another for holiday shopping. Then I opened up a couple more that were offering a better APY. Then the next thing I knew I had four savings accounts because I’m seeing the benefits. So I thought I would share with you why it’s good to have multiple high-yield online savings accounts.
It’s nice to have different savings accounts for different goals. Maybe you want a holiday fund. Or a vacation account. One can be for emergencies, such as car repairs or if an appliance goes out. It’s easier to keep track of each goal and more motivating when they’re in their own individual accounts.
Competition is good
With interest rates constantly fluctuating, it’s nice to have options. Maybe the interest in one account got lowered and you can move your money to the higher API savings.For the longest time Ally Bank’s interest was at 2% but they recently dropped to 1.6%. American Express is at 1.7% so I moved my money there. Make the companies compete for your business.
Out of sight, out of mind
When you have your money automatically transferred each month into multiple savings accounts you’re less likely to withdraw that money and more likely to reach your financial goals. It’s easy to have your money automatically transferred to a savings account every week or month. You have to do a little more work to make a withdrawal. So that’s good.
In case of constant withdrawals
Most online savings accounts only give you a certain amount of withdrawals per month before they start charging a fee. Usually around four. If you plan on making consistent and regular withdrawals then having multiple accounts is a good option to avoid those fees.
When your money is sitting there the goal is for it to be earning at least something. 1.7%-2% is better than zero percent. Physical banks don’t offer interest so the less you can use them the better off you will be.