Where you keep your money is just as important as what you spend it on. The right mix of financial accounts can help you stay organized and hit your financial goals a lot faster.

One of the most basic types of accounts is a traditional checking account. For some, one checking account is enough to get the job done, while others might benefit from having more than one checking account. Here’s what you need to know to decide if one or multiple checking accounts is right for your financial situation.

Checking accounts, explained

A checking account is a type of deposit account offered by banks and credit unions in which you can add money or make payments to cover bills and living expenses using a debit card, online bill pay, or personal check. Unlike a savings account or money market account, checking accounts are meant to be more transactional, with frequent deposits and withdrawals.

Checking accounts are one of the most common banking products held by a majority of American consumers. According to the 2021 FDIC National Survey of Unbanked and Underbanked Households, 95.5% of US households — about 126.6 million Americans — were "banked" in 2021, meaning that at least one member of the household had a checking or high-yield savings account at a bank or credit union.

When it makes sense to have multiple checking accounts

Instances where having more than one checking account could come in handy might include:

If you’re merging your finances

Having more than one checking account could make it easier to divide your monthly bills and keep your personal spending separate from shared expenses with your partner, roommate, or family members.

Say you share the cost of groceries or household products; having a joint checking account could make it easier to keep track of how much you’re spending on household bills and ensure that those expenses aren’t eating away at your personal budget.

If your checking account balance exceeds FDIC or NCUA coverage

Most deposit accounts are federally insured if your bank or credit union is a member of the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Association (NCUA). Typically, the limit is $250,000 per depositor, per account. The upside here is that if your financial institution fails, your money is protected. However, if you keep more than the maximum amount of money covered in your bank account, you could run the risk of losing some of those funds should your banking institution fail.

In these cases, it could make sense to open a separate account and keep some of your funds in that account so that you’re always covered. If you are putting away a large sum of money, the best place for it would likely be an interest-bearing account. While there are checking accounts that earn interest, these interest rates are typically lower than APYs on high-yield savings accounts, CDs, or money market accounts.

If your bank is offering a lucrative promotion or sign-up bonus

To attract new customers, banks or credit unions may incentivize you to open a new account by rewarding you with a sign-up bonus. The terms usually require that you set up direct deposit and fund your account within a certain period of time in order to take advantage of this kind of promotion.

You shouldn’t open a new checking account simply to take advantage of a sign-up bonus, but if your goal is to organize your finances and create separate accounts for different spending needs, a sign-up bonus might be the right reason to do so.

If you primarily bank online and need ATM or branch access

Online banks, or neobanks, have risen in popularity as a low-cost way to bank. Because these institutions don’t have brick-and-mortar branches, these banks can save on overhead costs and pass those savings down to customers in the form of lower fees and higher APYs.

The downside: If you bank with an online-only bank, you may not have the same access to ATMs or a bank representative that you do with a traditional bank.

In these cases, opening up a checking account at a different bank with a physical location near you could make it easier to transfer funds and withdraw cash without incurring steep bank fees.

If you’re starting a business

Many financial institutions offer financial products that cater to business owners like business checking accounts, credit cards, small business loans, and more. Keeping your personal transactions separate from your business transactions can help you keep better track of your income and outflow.

It can also help you understand how your business is doing from a profitability standpoint and simplify your recordkeeping in the event of a tax audit.

How to determine the right number of checking accounts for you

There is no “right” number of checking accounts, but there are factors you can consider to determine the right number of accounts for your financial situation.

What are your financial goals?

Outlining your short and long-term goals can help you narrow down which kinds of financial products make the most sense for you. The answer may not be multiple checking accounts. It could involve a mix of account types, perhaps a checking account for your everyday spending and a certificate of deposit for a longer-term savings goal like putting money away for a down payment for your first home.

If your aim is to grow your emergency fund, opting for a savings vehicle that is less accessible could make more sense so that you aren’t tempted to dip into your account for short-term expenses.

What does your everyday spending look like?

If you are moving in with your partner and have shared expenses as well as personal expenses — such as a monthly student loan payment — having more than one checking account will ensure that those funds don’t get mixed up.

If you’re still hesitant about the idea of opening another checking account, there are tools you can use to accomplish the same goal that multiple checking accounts would. Mint, Rocket Money, Honeydue, and EveryDollar are budgeting apps you can use to split bills with a partner, keep track of your monthly bills, or both.

Would multiple checking accounts simplify your personal finances?

Having more than one checking account can make it easier to categorize your income into buckets and allocate a certain amount; however, it can also make it more difficult to track how your income is being spent.

Certain checking accounts may also have minimum balance requirements that you’ll need to adhere to to avoid any added fees or penalties. If you prefer to keep things simple, you can opt for just one checking account for your regular spending and one savings account where you can save money for bigger expenses and goals.