If you ask 3 different people what bank accounts you need, you will get 3 different answers. This is not because one answer is right and the other is wrong, it is because the right answer is different for different people. For example, Joe Smith who lives in an apartment in New York and works as a tax accountant would have a much different financial picture than Suzy McQ who owns 4 rental properties, has a crafting shop, and lives in a 2,500 sq ft home in Georgia.

That begs the question, what is right for you? 

While no one can truly answer that question without a thorough knowledge of your current finances, your goals, your spending habits, and so forth, you can get yourself started with these 3 bank accounts, and add more as you find the need. Just remember, there is no right or wrong answer. Do what feels best for you!

#1 – The Checking Account

Ok, so this one may sound like a no-brainer, but it still needs to be listed. In order to have checks and credit cards, and use them on a regular basis, you will need a checking account. This is where some people say you need multiple checking accounts, and that is something you will have to decide for yourself.

Bankrate makes some very strong points about the negatives of having too many checking accounts, including fees, risk for identity theft, and multiple disclosures. You can find the article by clicking here. 

Of course, there are always reasons for having multiple accounts. If you have a business, you will want a separate checking account for the business for purposes of record keeping and taxes.

If you find yourself needing multiple accounts to track your own spending and budgeting, but you don’t want the risks and fees associated with that many accounts, you may want to consider a budgeting app instead. I personally use Mint and love it. It is free to use, and you can link all of your bank accounts to it. Then you can use your computer or smartphone to add budgets, see trends, and track your spending! Mint will even alert you to high spending or upcoming bills. It’s like a personal secretary, except you don’t have to pay them 😉 If you want to check out what they have to offer, click here.

#2 – The High Interest Online Savings Account

Let’s look at a typical scenario to understand the importantance of this account…

You are saving for your dream home. You faithfully put $200 aside every month to get you to your goal. After a few months, you check in on how your savings is growing and realize you have only earned a few pennies on interest. You think “my goodness, that is so far behind inflation, my money isn’t growing at all!”. And you would be correct.

According to Inflation Data the long-term average inflation rate is slightly over 3%. With prime at a low rate of 4.25% in the US, this means that the savings rates are holding low too. My regular savings rate at my bank is .05%.

What do all those numbers mean? Basically that interest rates are so low on your savings accounts at brick and mortor banks, that inflation is far exceeding them. Instead of making your money, your savings might actually be hurting you…ouch!

Enter the high interest online savings accounts.

Ok so maybe no drum roll is needed for them, as they still don’t surpass inflation, but they do so much better than the regular bank accounts that they are worth having. After all, you need to save your money somewhere. So what is better, earning .05% or .75% on your money?

I have been using Capital One (formerly ING Direct) for many many years now. I have an automatic transfer set up, so each pay day it takes a prespecified amount of money and puts it into my savings account. I can save on autopilot. I also love that you can have different goals set up and it helps you track your percentage of your goal so you know your progress.

The interest rate has been holding steady at .75%. Hopefully as prime goes up, that will change too. A girl can dream right?

I’m not making it rich from the interest in my account, but my money is safe, I am saving for a goal, and it is doing much better than sitting in a regular savings account earning next to nothing. If you haven’t delved into high interest savings accounts, you are missing out!

Be sure to check out Capital One by clicking here. And yes, that is an affiliate link, but I only recommend this because I have only ever had great things to say about them. And when you open an account with them through the link above, you get $25! It’s free to open an account, and actually they pay you to do it. Win-win! So get your $25 bonus now!

#3 – The Traditional/Emergency Savings Account

After talking all about the perks of an online savings account, you may be wondering why you also need a traditional savings account at your local bank. After all, the interest rate is super low, and it usually doesn’t come with extra features like goal progess tracking.

Traditional savings accounts at local banks are needed for the main purpose of acting as an emergency savings account. A lot of people do not realize that with the online savings account, it takes a few days to 1 week to transfer money back and forth. This is great in the sense that you won’t spend it on silly things, but not as great when you need your money immediently.

If your car breaks down or your A/C dies in the heat of the summer, you don’t want to be waiting up to a week for you money to transfer. You want to be able to press a button and have your money available to you asap. With a traditional savings account at your bank, you can do just that. If you have the savings account at the same place you have your checking account, you can quickly do a transfer. If you choose a different bank for your savings account, then you could withdraw money from the savings account and go to the other bank to deposit.

If you aren’t sure whether you want to open your checking and savings accounts at the same bank or seperate banks, then you wouldn’t be alone. There are pros and cons of both, and it also depends on your current financial situation. LearnVest has a great article that helps to compare the 2 options, hopefully making the decision for you that much easier.

Now that you know what 3 bank accounts you need, or at least which ones you should start with, it’s time to get started!

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