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  • Writer's pictureVictoria Wallis-Smith

How many accounts do you need?

Back in the day, our grandparents used envelopes for grocery money and to set aside something for a holiday, or Christmas. A simple system, but it worked.

These days, you might build savings in your offset account – or pay extra on your loan and redraw if needed. And that makes a lot of financial sense – no question, it saves on interest.

But few of us are saving for just one thing. You might be planning an overseas holiday. And replacing the car might be on the horizon. With a single account, that can be hard to track.

So, what if you used multiple savings accounts?

Savings. Goals. Money Coach.

With multiple accounts – one for each goal – you can track your different savings targets, and know how much you’ve saved for your holiday versus the new car.

Let's look at some reasons multiple savings accounts can make good financial sense.

Do you have multiple savings goals?

It’s typical to be saving for a number of things, usually with very different time frames:

  • Big annual bills.

  • Holidays – often every year, or second year.

  • Replacing the car – in a couple of years’ time.

  • And a Rainy-Day Reserve – money you want to hold for an emergency.

If your savings are lumped into one account, it’s hard to separate them out – and hard to get a clear picture of where you're at financially. And that can cause stress!

As well as being able to track your progress more easily, with multiple accounts you can access different features. For example, a high-interest savings account might limit withdrawals, which suits you for longer-term goals. But a separate savings account that allows you to earn interest with easier access to might be a better fit for your short-term goals.

Separate savings accounts also allow you to set up a regular transfer for a specific amount to each individual account, gradually working towards each and every savings target.

Have you reached your savings target?

With a single account for your savings, it’s hard to know if you’ve met your target.

Let’s say you’ve got $10,000 in an account – but how much of that is the Rainy-Day Reserve you’re building, and how much is for your holiday? Not a great way to instill cashflow confidence!

And it’s even harder to be confident once that $10,000 is buried in your offset account with money for all your everyday expenses.

Disadvantages of multiple savings accounts

Regardless of whether you open multiple savings accounts across several banks or with the same bank, there are some disadvantages:

  • It can get confusing. Although the aim of opening multiple accounts is to simplify your savings, the opposite can end up occurring. So make sure you can handle it before you adopt this approach. The last thing you want to do is lose track of any of your money.

  • Meeting the conditions for bonus interest. You might be using your bank because they offer a good interest rate on the savings account – but it’s likely any bonus rate will only apply to one account. By spreading your funds across multiple accounts, you may not meet the requirements for bonus interest (or tiered interest).

  • Similarly, more accounts may expose you to the risk of paying fees – as the requirements on different accounts can be variable and change.

One account with multiple savings buckets

A feature that a number of banks are now offering is having savings buckets, or targets, within the one savings account. So you have the simplicity of one account but enough separation to manage and track your savings goals – yay!

The feature is easily accessed through your mobile banking app, and you decide what to name the savings goals and how much your savings target is.

Still, there are some things to consider:

  • Pros – one bank and app to deal with can be more efficient and transferring funds between accounts is often ‘instant’.

  • Cons – banks offering this feature often don’t offer the highest interest rates.

Need savings help?

If you’re not making progress with your financial goals, have a chat with Victoria Wallis-Smith at Nutshell Money to discuss how money coaching can help you.


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