Better banking habits | How I use 4 bank accounts to save more money


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All year long,‘s Michael Timmermann is sharing quick and easy ways to save money as part of our Michael Saves series. Check in every Monday as he puts new and familiar savings strategies to the test. Sign up for our newsletter to have these stories delivered to your inbox!

When you were just starting out, you probably opened one checking account and one savings account to manage your finances — I know that’s what I did.

But what if doubling the number of accounts could help you reach your savings goals even faster?

Read more: How to choose and switch to a better bank for you

Manage your money with 4 bank accounts

For about a decade, I’ve used four bank accounts, both traditional and online, to closely monitor my spending — and I never pay annoying bank fees.

In fact, this strategy helped me stay on course as I paid off my $86,000 mortgage in two years.

My money management system

I start by having my direct deposit payroll check split and deposited into two checking accounts, then manually transfer funds to two savings accounts.

Here’s a closer look at the money management system that works for me:


1. Traditional checking account = Fixed expenses

This is the first of two accounts where my paycheck is deposited. I use this account to automatically pay my fixed expenses when the bills are due.

Examples of fixed costs are payments for your mortgage, car, insurance and some utility bills.

My traditional checking account is with PNC, a regional bank that waives the monthly maintenance fee for customers who set up direct deposit or keep a $500 average monthly balance.

I keep this account because I like being able to walk into a bank occasionally to deposit cash.

2. Traditional savings account = Rainy day fund

I also have a savings account with the same regional bank. I keep only about $1,000 or so in this account to pay for unexpected expenses — my rainy day fund.

Like the checking account, the interest rate is not good. That’s why I keep the balance so low.

Since these two accounts are with the same bank, I’m able to move money between them quickly if a “mini-emergency” comes up.

3. Online checking account = Variable expenses

The second part of my paycheck is deposited into my online checking account with Discover Bank. I use this account to take care of variable or flexible expenses, including:

  • Groceries
  • Fuel
  • Clothing
  • Personal care items
  • Entertainment
  • Eating out
  • Haircut

I charge most of these variable expenses to my credit cards and manage the bill payments through my online checking account.

I love how Discover pays 10 cents cash back for every online bill payment, up to $120 a year.


In addition to the great perks, there are no monthly fees. I also never have a problem finding a free ATM in the Allpoint and MoneyPass networks.

The one downside? There’s no way to deposit cash. At least I have PNC for that”¦

4. Online savings account = Emergency fund

My fourth and final bank account is also with Discover. The savings rate of 1.15% APY is one of the best available, far better than the 0.01% that I earn with PNC.

I keep most of my money in this account — my emergency fund — and it earns the most interest.

The purpose of an emergency fund is to cover at least three to six months of living expenses in case you can’t work for a period of time, for whatever reason.

Beyond that, I’ll transfer extra funds into this account to help with fluctuations in flexible expenses.

Bottom line

How does having four bank accounts save more money? Accountability.

Those variable or flexible expenses are the ones that I continually work hard to reduce, and separating those expenses from fixed costs really helps me control spending.

When my online checking balance gets too low, I know to immediately dial back on those impulse buys.

I also use a personal finance app to keep tabs on all of my accounts and sign in to them individually about once a week to review the activity.


From time to time, go through every budget category and look for ways to save. It really works!

How many bank accounts do you have to manage your money? I want to hear about how you organize your financial life on Facebook and Twitter.

Check out more from our Michael Saves series:

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