Do you need to have your checking and savings at the same bank?
If you've held all of your deposits at the same bank for a while, it could be time to branch out.
Not only can you have your checking and savings at different banks, but many people will benefit from it. Checking accounts and savings accounts serve very different purposes in your financial portfolio, and some banks may specialize in one account type over another. By banking separately, you can find the specific account type best suited for your banking preferences, get the best interest rates and even help yourself meet your spending and savings goals.
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Do you need to have your checking and savings at the same bank?
If you're in the market for a new bank account, there's no reason to consider only your current bank. In fact, here are a few ways you can benefit from having your checking and savings accounts at separate banks:
Better interest rates
One of the best reasons to open a savings account at a different bank is so you can shop around for the best interest rate. Many people have checking accounts with large, national banks or smaller local financial institutions for the proximity and convenience. But the best savings account APYs often come from online banks with no in-person access.
If you're willing to move your savings balance to a new online savings account, you can potentially earn more than 12 times the national average. Plus, it's still easy to access your money. Some banks require a day or so to transfer between external accounts, but you'll maintain relatively quick access to your savings anytime.
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Savings buffer
Another reason to keep your savings account at a different bank is more behavioral. By separating your savings from your spending money, you might reduce some of the temptation to use it.
"The bank where your checking account lives may not be the best place for larger sums you don't need for immediate expenses," Charles Thomas III, CFP and founder of Intrepid Eagle Finance, recently told CBS News. "Look at some of the online providers as a potential home for something like your emergency fund that does not require day to day access," Thomas recommends.
More flexibility
When you open a checking account with one bank and a savings account with another, you don't have to worry about compromising any features or account details.
One bank may offer bad savings rates, but have checking features like a large ATM network, convenient branches and lack of fees that appeal to you. On the other hand, you might find an online savings account with one of the highest rates offered today, but not like the online bank's lack of brick-and-mortar locations or ATM options when it comes to checking.
With accounts at different banks, you can get the full benefits of the savings or checking vehicle you want, without having to settle for a less-than-ideal version of the other account.
Did you know you can earn interest on your checking account, too? Find out how much you can get with today's top checking accounts here.
When to keep your accounts at the same bank
Some bankers might still prefer to keep their accounts in one place given certain circumstances.
Maybe you have a checking account with a bank or credit union that also offers great rates on savings. For example, some online banks have checking account options that come with broad ATM networks and easy digital account access. In that case, you might get a similar interest rate as you would elsewhere, without having to make the switch.
Keeping accounts with the same bank may also be the only way to get instant access to your savings when you need it. While external transfers can take up to a few days, some banks allow you to transfer between internal accounts instantly — a big benefit if you have a timely emergency.
The bottom line
If you're looking to get the best of both worlds when it comes to banking, consider opening checking and savings accounts with different banks. There are cases in which it makes sense to keep your accounts together. But many people will benefit from the better interest earnings and added flexibility they can get from separate accounts.
Start earning more on your savings today and compare top savings account rates here now.
