How many accounts do you need?



Several women asked us: how many accounts should I have? One, three or six? Six is suggested by T. Harv Erker, author of “The millionaire mindset”? More? Or less?

Most money management experts recommend to keep it simple.

Do not own more than three bank accounts – thus minimizing the risk of forgetting about an account’s existence – just to then notice that you forgot to balance it. And now have to pay overdraft fees (“Dispozinsen”).

I remember the era when I was a foreign exchange student in France or when I worked in the UK: I had four accounts or more and lost track of them. In my personal opinion it is better to a maximum of three accounts. These should entail:

  1. A regular checkings account – have your salary transferred to this account, pay your bills using this account

  2. A money market account – in lieu of a regular savings account – use this option to earn a slightly higher interest fee than on a regular savings account

  3. In case you want to keep your emergency fund capital separate – use a second money market account for this sum.

The above pertains to singles or people keeping their money separate in a partnership. Depending on your personal situation, you may want to install one joint checking account with your partner or family – so that all joint expenses get deducted from this. Note: we strongly recommend that no matter what the status of a partnership, it is beneficial if you have a checking account to yourself.

Other considerations:

  • Do you possess capital in different currencies? Consider opening an account with an international financial service provider which let’s you have accounts in different currencies (Revolut comes to my mind)

  • Want to make sure you set aside enough money for a bigger financial goal? American author Rachel Morgan Cautero suggests using yet another account for this

  • Get a multi-aggregate app that helps you maintain an overview of your various accounts.

Ultimately, you need to know which number of accounts best suits you and your money management preferences. Some people like to have few accounts so that they do not feel overwhelmed. Others prefer having a multitude of accounts (checkings, saving, money market) which they treat like savings buckets. We at Finelles recommend that you limit yourself to 2-3 accounts.

Written by Caroline-Lucie Ulbrich
Finelles Founder. Coach and organizational consultant (ECB, Deutsche Bank and UBS).  



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