Financial planning: Why you should scatter your bank accounts

Q1906

Checking and saving accounts go together like bacon and eggs, but both are good separately, too. You don’t need to have all your accounts at the same bank. In fact, you might benefit from splitting them up.

About one-third of people who switched banks recently or wanted to switch had checking and savings accounts at different banks, according to research by bank analytics firm Novantas. And about 11% of bank customers switched banks over the course of a year, based on Accenture’s 2016 North America consumer digital banking survey.

Here’s why it makes sense to scatter your money.

1. Maximize your returns

It’s possible to find a bank account with a decent interest rate despite the national averages— 0.06% annual percentage yield for regular savings accounts and even lower for interest checking, according to the Federal Deposit Insurance Corp. But some online-only banks offer checking rates higher than 0.50% and savings rates north of 1% APY.

You might reach savings goals faster with a high-yield account. Having $10,000 in one with a 1% rate earns you $100 in a year, compared with $6 at the national rate.

2. Take advantage of perks

Some banks offer sign-up bonuses, and credit unions tend to charge lower fees than banks do. Other banks and brokerages don’t charge foreign transaction fees.

Ahmed Bhuiyan, a Seattle-based travel industry consultant, switches between his banks when on the road. He likes one bank’s domestic ATM network but uses a checking account at another bank to avoid foreign transaction and ATM fees.

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