Do you do business with only one bank? I’m sure many of you do but the better question is should you do business with only one? I believe there are many reasons why you should have accounts at more than one bank.
If the Great Recession taught us anything it is that financial companies can do some really dumb things. There are never any guarantees but having accounts at more than one bank can diversify where you money is. You diversify every where else in your financial life so why not with your banks as well? If push comes to shove, hopefully at least one of the companies you place your deposits at will act responsibly.
Bank vs Credit Union
Speaking of diversification, why not do business with a credit union. The dumb decisions being made during the financial meltdown mentioned above was mostly on the part of banks. Credit Unions have many advantages over banks. They tend to charge less fees as well as offer better customer service. After all, they are local and once you become a member your now part owner.
Having only a checking account at one of you banks can have many benefits. You can keep a small balance at this bank and use your debit cards, checks and auto drafts to pay your bills. If you debit card or bank information gets stolen, your losses will limited. Since you have most of your money at another bank you will have funds available until you other account balances get restored. With skimmers appearing in the wild more and more and data breaches increasing every year, adding extra layers of protection will always be a good idea.
You can always keep your main checking account mentioned above at a local, easily accessible bank or credit union. You then can place the majority of your money with an online bank that pays much better rates than what you can get from a retail institution. This dual online and brick and mortar approach has another great advantage…
The advantage of convenience. Simply put, sometimes you just need to go to your bank. Whether you need something notarized or a safety deposit box, having access to a local branch can be an indispensable commodity that you don’t realize you need until you need it.
Out of Site, Out of Mind
When you have to work hard to spend money, you tend to spend it only when necessary. This is another advantage of having your main checking (spending) account separate from your savings account. Simply setup an auto deposit with you employer to have a certain amount of your paycheck sent over to you savings account each paycheck. You won’t miss what you don’t see and it is a great way to make saving easier and more automated.
Simply put, having multiple banking relationships can help in many areas. There is really nothing to loose when using this approach, only numerous advantages to gain.