Can I Have More Than One Bank Account?
Thinking about opening another bank account? It might sound like hassle, but having multiple accounts can make managing your money easier for some people. In this article, we'll dive into the benefits and things to watch out for when opening more bank accounts.
Thinking about opening another bank account? It might sound like hassle, but having multiple accounts can make managing your money easier for some people. In this article, we'll dive into the benefits and things to watch out for when opening more bank accounts.
What are the rules? Can I have more than one current account?
Yes, in theory you can have as many as you like, but:
- Being accepted for a new account depends on your circumstances
- Qualifying for the perks they offer depends on how you manage that account.
As we explain later, applying for most (but not all) current accounts will be recorded on your credit file. Too many applications in a short time can have a negative impact on your credit rating.
Why might you think about opening more than one current account?
Many people find that having multiple accounts helps them manage their finances more effectively.
There are plenty of reasons for some people to open extra bank accounts:
- Avoid arguments over bills – you could set up a joint account with your partner for household expenses. Transfer an agreed amount each month to cover bills and shared treats.
- Earn more interest – you could transfer your savings into current accounts with higher interest rates and perks. Or open a second account as some banks offer better savings account rates to current account holders.
- Keep tabs on different income streams – you could create separate accounts for different income sources such as multiple jobs or rental income. This can make self-assessment tax returns simpler.
- Keep track of your spending – you could use separate accounts for different types of spending, such as bills, food and treats. This can help with budgeting your finances.
- Keep your business income and expenses separate – you could open a business account to separate company finances from personal ones. This simplifies tax calculations and tracking business performance.
- Access money if there’s a tech failure at your bank or your card is stopped for suspected fraud – it’s useful to have a back-up in case there’s a problem with your card or online account. For example, when TSB moved to a new IT system in April 2018, up to 1.9 million customers were locked out of their accounts for several days.
What’s more, you can also get a variety of perks with different current accounts. This means you may be able to maximise more benefits with having more than one account. For example:
- Cashback on your household bills and supermarket spending
- Interest on your current account balance
- Fee-free overseas spending and cash withdrawals
- Access to exclusive savings accounts and interest rates
- Multiple sign-up bonuses
- So-called “packaged accounts”, where for a fee you get extras, such as travel or breakdown cover.
Always check your terms and conditions so you know how to keep getting any account benefits. This could be paying in a minimum amount or spending a certain amount each month.
Can I have multiple savings accounts?
Yes, you can have multiple savings accounts. There are different types of savings accounts you might want to take advantage of such as:
Each type offers various benefits, such as higher interest rates or tax-free savings, which can help you meet different financial goals.
It’s important to know that the Financial Services Compensation Scheme (FSCS) protects your savings up to £85,000 per UK-regulated financial institution if they go bust. You can confirm if your organisation is regulated and how you’re protected on the FCSC Banking & Savings Protection Checker.
If you’re lucky enough to have more than £85,000 in savings, it’s often wise to spread your eggs across more than one account. Savings accounts are usually easier to open as you normally don’t need to pass a credit check.
What our expert says...
“Really savvy people often have more than one current account or savings account, so don’t see having a few as a problem, but just make sure you stay disciplined and keep to the account terms and conditions.
For example, I have one current account for my everyday finances and another that I choose to pay a fee for because it gives me a wide range of other perks such as travel and mobile insurance.”
- Guy Anker, Personal finance and insurance expert
Things to think about before opening another current account
If you want to open a new current account, you may find that the bank attaches certain conditions. For example, it might need your salary to be paid into the account, or make you set up direct debits from the account. Other banks will happily open an account for you if you pass their credit check and pay in a certain amount of money every month.
Remember, if you have more than one bank account, you can potentially move money between accounts to meet these criteria. But make sure you check and understand the conditions for any bank account you open.
How to manage multiple bank accounts
Many banking apps allow you to manage multiple accounts in one place, even if they’re with other account providers. There are also a variety of bank account aggregator apps which will do similar things. This allows you to get a better overview of your saving and spending habits, as well as manage your money more effectively.
To manage multiple bank accounts, think about setting up standing orders so your money automatically goes to the right account. For example, you could get your salary paid in one account, then have standing orders to your savings and joint account.
Will having multiple bank accounts affect my credit score?
Having multiple bank accounts can affect your credit score, especially if you apply for several accounts in a short period.
- Each application can result in a hard search on your credit report, which may temporarily lower your score if you have too many in a short time.
- Also, if you have overdrafts on multiple accounts, these could impact your credit utilisation ratio and overall creditworthiness.
It's essential to manage each account responsibly and be aware of the terms and conditions to avoid any negative effects on your credit score. If you do that, it can help you.
Frequently asked questions
How is opening an additional account different to switching accounts?
When you formally switch bank accounts, your old account will be closed and your balance transferred. This is along with any payments or direct debits you make from that account.
Opening a new account in addition to your existing current account means your old one will remain active. If you want to transfer any money or change where your payments come from, you’ll need to do this yourself.
Should I open multiple bank accounts with the same bank?
You may find it easier to open multiple accounts with the same bank – for example, a current account and another for savings. But check what else is out there, so you get the right deal.
A few things to keep in mind:
- If all your money is with the same bank and there’s a glitch with the system, you may not be able to access it.
- The FSCS compensation limit is £85,000 per financial institution, regardless of whether your money is spread across different accounts with the institution.
- If you’re trying to keep your savings safe, some banks might be operating under the same licence even if they appear to be separate companies.
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This article is written by a Compare the Market expert, backed by data and enhanced by AI. Find out how we ensure accuracy and quality in our Editorial Guidelines.