General Question

janbb's avatar

Is there any advantage to having savings in more than one bank?

Asked by janbb (57223points) January 20th, 2017

As asked. Thinking of consolidating some accounts for simplicity but wondering if there is a downside – other than FDIC limits.

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24 Answers

zenvelo's avatar

The FDIC limit is the only reason to spread it around.

Espiritus_Corvus's avatar

^^That, or in the case of hiding money from the US government. The Swiss bank integrity is still good after they demanded our investigators back off in return for them accepting prisoners from Guantanamo. And a stop off to the Channel Islands on your next trip to France would be beneficial, or a detour to the Caymans on your trip to Cuba. LOL. I seriously don’t think you would bother with such things, though.

Unless you are banking more than the insured FDIC limit, there is no need for multiple savings accounts.

janbb's avatar

I tend to think of it like hiding money in separate pockets so it has some psychological advantage for me but I was thinking about if something happened to me and my sons had to deal with it.

Espiritus_Corvus's avatar

I think @zenvelo would be able to answer that question. The important thing would be that the sons would know about the various accounts through your will. A search for assets by inheritors is expensive. And if you think that a Trump presidency would bankrupt America, you might look into offshore banking and international dispersal of assets. Again, zenvelo would be the man.

chyna's avatar

Maybe it would serve to make it a little harder to get to. I have a list of all accounts for whoever is left to look after my affairs when I die.

Rarebear's avatar

Why are you keeping your savings in a bank? Interest rates are still at historic lows and you’re not making anything.

janbb's avatar

@Rarebear It’s not the bulk of my savings – I have an investment portfolio as well. It’s more my emergency funds if there’s a crash.

flutherother's avatar

Don’t take it to the extreme like W C Fields

janbb's avatar

@flutherother Don’t worry – there isn’t that much to spread around!

Espiritus_Corvus's avatar

^^LOL. He also had a huge stash of liqour in his basement in case prohibition came back.

janbb's avatar

@Espiritus_Corvus I was just down in my basement. Alas – only two bikes, various tools and a child’s car seat.

Cruiser's avatar

Consolidating funds can often bring with it perks and less fees or not. I had the FDIC limit in one bank I used to bank at and after 2 years of banking there all of a sudden I got a $25.00 fee for no activity in the account! I was livid and went there and cleared out all my accounts. Sad part is the bank exec did not even blink when I did.

janbb's avatar

@Cruiser Yes, one bank I had denied payment on a check because I hadn’t used that account in six months. Said I had to come in. I plan to cash out that account soon.

Rarebear's avatar

@janbb Oh. In that case, I have money in my local credit union that I use to keep extra fluid cash. I also have a Vanguard account with money that is also fluid that I can utilize but I get realized taxes if I withdraw.

In my case I don’t see a big reason to keep a lot of reserves in cash. I pay for everything with a credit card that I pay off every month. I have enough for that and also emergency. I keep about 2 months salary in the account.

janbb's avatar

Yeah – we all do what makes sense to us.

YARNLADY's avatar

We have multiple accounts in a variety of banks. One reason for this is the perks that banks offer for opening an account, such as depositing $100 into the account for meeting the requirements stated, such as auto deposit, using a specified number of times and such.
Over the space of a year, we have received hundreds of dollars.

chyna's avatar

@YARNLADY I never thought of that. Good to keep in mind.

janbb's avatar

Yes – that is one of the reasons for the extra accounts.

RedDeerGuy1's avatar

I have multiple accounts to stop me from over spending. When I run out of one then I have a warning.

imrainmaker's avatar

Keeping in 2 /3 accounts is fine. More than that would be overhead for you. As you / cruiser mentioned you’re at disadvantage if you don’t operate that account regularly which is very much possible in case of more 2–3 accounts. Spreading your money is always good if the bank with which you have the money gets in trouble for any reason!

JLeslie's avatar

My money was frozen during the savings and loan fiasco in the 80’s. It was frozen for a few months. It was not FDIC, but I still think don’t have all your eggs in one basket. You have money in other places too I understand. The other answer is of course FDIC limits of $250k per account.

I assume by savings you mean money market.

I too have opened accounts at times for the cash on new accounts, or high interest rates for the first 3 months or 6 months.

VenusFanelli's avatar

There’s a limit on how much the FDIC insures, so if your balance is over that limit, split it into one or more accounts in other banks, so that it’ll be covered.

janbb's avatar

Yes – I knew that. Thanks.

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