Why You May Need More Than One Checking Account

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Keeping track of your expenses can get complicated really quickly, what with all the different methods of payment we use these days.

Money expert Clark Howard recommends adding something to your financial toolbox that could help simplify things: a secondary checking account that you use just for certain expenses.

In this article, I’ll examine why you may want to open more than one checking account and what type of financial institution to choose.

Here’s Why You May Need More Than One Checking Account

Having a secondary checking account can help you keep track of where your money goes, but it can also help you prevent overdrawing accounts and can even help you monitor for potential fraud.

Here are a few examples of payment methods and expenses that could work best coming from a checking account that is separate from your primary account.

Payment Apps

Payment apps, which allow you to withdraw and deposit payments onto your debit card, come with innate security risks. Clark says the best way to protect yourself is to minimize your exposure.

“What I recommend is that if somebody wants to use Zelle or CashApp or Venmo, set up a separate checking account that has very small amounts of money in it.

“That way, even if you are hacked, compromised or scammed, the amount of money that is at risk is really tiny, whereas if you have it with your regular checking account, all the money in it is at risk,” he says

Automatic Payments

Anything that requires you to authorize automatic payments is something you’d want to attach to the secondary account.

Gym memberships are just one example that comes to mind. Especially if you’re not using that membership much, you may forget the money is coming out of your account, and that could cause you to overdraft. (Of course, if you’re not using it, you should probably get rid of the membership.)

I can attest to the fact that sometimes those memberships are tough to cancel. It can take repeated phone calls and even letters written to the company before the billing stops.

Perhaps you want to take advantage of a new streaming service or a retail membership program like Walmart+. Because it’s so easy to forget about these monthly subscriptions, it makes sense to pay for them with a secondary checking account.


Where Should You Open Another Account?

Clark doesn’t have a problem with you parking your money at more than one financial institution.

Specifically, he recommends opening one checking account at a bank or credit union with physical branches and another at an online-only bank.

Read our guide on the best free checking accounts (they’re all online accounts).

Final Thoughts

Clark says opening a secondary checking account is a smart financial decision, but it should be used in limited ways.

“In that separate account, you should only have enough money in there that you need for your walking-around money [and] if you’re using debit or as a way to pay back friends, split bills and that sort of thing if you use payment apps.”

Bottom line: If a company requires you to authorize withdrawals from your bank account, it’s a good idea to open a checking account that’s separate from your primary one and fund it only with the money you need to send or pay.

Read our guide on how to manage your subscriptions.

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