One savings account might be enough for your financial needs, but you might be surprised to learn that there are plenty of good reasons to have more than one.
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Whether you want to segment your savings goals, organize your money or make it work harder for you, here are seven key signs that you need to open more than one savings account in 2025.
You Want a Better Interest Rate
Different savings accounts can offer varying interest rates, and it may make sense to hunt for the highest yield, according to Christopher Stroup, CFP and owner of Silicon Beach Financial.
“If you notice that your current savings account has a low-interest rate compared to others, consider opening a specific savings account, such as a high-yield savings account or accounts that regularly reward contribution.”
By spreading your money across accounts with higher interest rates, you can maximize your earnings and make your money work harder for you, he said.
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You Want To Improve Budget Management
If you find it challenging to stick to a budget, opening additional savings accounts can enhance your budgeting strategy, Stroup offered.
“In practice, this could mean having separate accounts for discretionary spending, bills and savings. This separation can help you visually manage your finances and limit access to funds allocated for specific purposes.”
This framework can give you a better chance of reducing the temptation to overspend on one area while neglecting another.
Your Emergency Fund Is Topped Out
The standard advice for an emergency fund is to keep three to six months worth of income in a liquid savings account of some kind. If you’ve reached a balance above that, Patrick Sabol, a senior lead planner with Facet, suggested that if your emergency funds are getting top heavy in one savings account, it could be time to open a new one.
You Want To Create Unique Savings Goals
Having different buckets of savings accounts can make it easier and more likely that you’ll save for multiple, unique goals, Sabol said, such as purchasing a home, making a renovation or starting a vacation fund.
He recommended working backwards from your goals, so rather than thinking about how much money you have in an account and choosing your goals accordingly, you would figure out your specific goals, the time it will take to accomplish them and then allocate that amount according to your timeline into its designated account.
Your Savings Goals Have Different Timelines
If your savings goals have different timelines, for example in one account you’re saving for a vacation less than a year away, but you’re also saving for a downpayment on a home that could take five years, you may need different accounts.
“So think about when am I realistically going to have enough to meet that goal? If I need a hundred thousand dollars for a down payment, I’m saving $2,000 a month, then I know that’s going to take me more than two years to save that, I should probably put it in a brokerage account. If it might take me three to five years, I’d make more money traditionally being in a diversified investment portfolio versus being in cash equivalent.”
All Your Money Is in One Type of Account
It’s very common, Sabol said, for people to put all their savings into one high-yield account for the duration, which he doesn’t recommend.
If all the money for multiple goals — say a home purchase in the next couple of years, an education savings and saving up for a trip — are all sitting in one account, “That would be an indicator that we should open up some different accounts,” Sabol said.
There are, of course, multiple types of accounts. From traditional savings accounts, which typically offer very low interest, to high-yield savings accounts to money market and brokerage accounts, retirement accounts, health savings accounts and more. A general rule of thumb, he said, for liquid savings beyond an emergency fund, should be saved in liquid accounts for goals that have up to a two-year timeline.
You Want To Track Your Progress
Another key sign that you need multiple accounts is when that helps you organize and track your saving progress, Sabol suggested. “It’s really hard to track my progress about when am I going to reach my home improvement goal or my emergency fund goal if it’s all in one account and commingled.”
Be Careful Not To Have Too Many
All that said, Sabol said he also cautions against having too many accounts. “I don’t think you should be chasing these offers and then all of a sudden you have 16 different accounts and you don’t have track of what they’re for.”
Look At Net Yield
Sabol also recommended that you be sure you’re choosing accounts with the highest yield feasible in the time frame that you’re saving in. “If I have a money market where the net yield is higher than when I’m buying in high-yield savings accounts, then I would probably just open up multiple money market accounts because they’re pretty easy to get money in and out.”
Vet the Institutions
Before you go chasing the highest yield, he warned, be sure the banks or institutions you’re signing up with are legitimate and FDIC insured. Many online banks can offer a high-yield but your money is not protected in the worst case scenario.
“Always make sure you’re looking up the company you’re opening up an account with, look up the Better Business Bureau rating, make sure that they have good reviews.”
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This article originally appeared on GOBankingRates.com: 7 Key Signs You Need To Open More Than One Savings Account in 2025
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