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Is it worth getting more than one bank account?

Are there any benefits to having multiple bank accounts? And if so, how many can you have? We look at what you should consider before opening an extra account.

Are there any benefits to having multiple bank accounts? And if so, how many can you have? We look at what you should consider before opening an extra account.

Written by
The Editorial Team
Experts in personal finance, insurance and utilities
Last Updated
7 FEBRUARY 2023
6 min read
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How many bank accounts can you have?

You can have as many bank accounts as you like, from any bank that’s willing to let you open one. Keeping track of multiple accounts can involve extra legwork, but there are definite benefits.

You may already have more than one bank account. Lots of people use a current account for everyday banking, then transfer any extra into a savings account.

There are plenty of other reasons to open extra bank accounts. Maybe you want a joint bank account with your partner so you can pool money for bills and household expenses.

If you run your own company, you might want to keep that income in a separate business account to make bookkeeping easier. Or you could find some accounts offer useful perks, such as free foreign transactions.

What are the benefits of multiple bank accounts?

Here are some great reasons to have more than one bank account:

  • Avoid arguments over bills - set up a joint account with your partner and transfer in an agreed amount each month to cover household expenses, making bill paying fair and up front. Why not agree to add a bit extra each month for shared treats
  • Work towards different savings goals - say you’re saving for a deposit on a new home, but also want to save for a holiday and keep money aside for unexpected expenses like your boiler breaking down. You can open three savings accounts and use direct debits to allocate a portion of your monthly income for each.
  • Earn more interest - although savings rates are creeping up, you could find it’s worth transferring your savings to a current or packaged account to take advantage of higher interest rates and extra perks. Some banks offer better rates to current account holders, which may make it worth opening an account.
  • Keep tabs on different income streams - if you have more than one job, or receive income from letting a property, it’s often useful to keep your earnings in separate accounts. This can make life easier when it comes to completing your tax returns.

  • Keep track of your spending - some people find that setting up separate bank accounts for different types of spending helps with budgeting. For example, you might have one account for rent/mortgage payments and bills, another for food and petrol, and another for treats and days out.

  • Keep your business income and expenses separate - if you own a business, it’s worth opening a business account to keep your company income and spending separate from your personal current account. This makes it easier to calculate tax and track how your business is performing.

  • 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. There have been some spectacular systems failures at banks, where customers have been unable to access their money for days – sometimes weeks. 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, while others faced problems for more than a month.

  • Enjoy savings protection under the Financial Services Compensation Scheme (FSCS) - the FSCS protects your money if your bank, building society or credit union fails. However, it only protects a maximum of £85,000. If you have more than this, you may want to open a new savings account to spread your money.

  • Make the most of perks and rewards - if you have a decent income coming into your current account each month, consider opening a packaged account to reap the rewards. Packaged accounts often include things like travel and gadget insurance, and can offer special savings rates to customers who pay a monthly fee or deposit a certain amount each month.

    Find out more about packaged bank accounts.

  • Set up foreign currency accounts to use abroad, without paying fees - this is useful if you travel regularly. Instead of constantly visiting the Bureau de Change or paying exorbitant fees to withdraw cash abroad, open a foreign currency account that lets you transfer money from your current account without the usual fees.
  • Try one of the challenger banks - challenger banks are taking on traditional banks by offering improved services, such as out-of-hours banking and free ATM withdrawals abroad. Some, like the popular Monzo and Starling, are purely app-based and offer tools to help you track your spending, split bills with other users, and create different savings and spending pots for easier budgeting.

What should I be aware of when opening multiple bank accounts?

If you want to open a new current account, you may find that the bank attaches certain conditions. For example, they might require 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 as long as 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 fulfil these requirements. But make sure you check and understand the conditions for any bank account you open.

There’s no point opening a bank account you can’t use or don’t need, especially if it’s going to leave you paying fees you can’t afford. And bear in mind that applying for multiple accounts within a short time period could negatively affect your credit score.

Take a good look at your personal finances before rushing to open a new account. Opening a joint account can be a great way to manage household finances and might be a no-brainer, but opening a packaged account to get a reward may not be worth it if there’s a fee.

How can I manage multiple bank accounts?

You’ll need to be more organised - consider setting up standing orders so your money automatically goes to the right account. For example, you could receive your salary in one account, then have standing orders to your savings and joint account.

Frequently asked questions

How is opening an additional account different to switching accounts?

When you switch bank accounts, your old account will be closed and your balance transferred, 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.

Find out more about switching bank accounts.

What are jam jar accounts?

Jam jar accounts let you put money into different ‘containers’ within the same account. This allows you to split your money between, say, household expenses, everyday spending, and leisure and entertainment. It’s as if you were using real jam jars at home. Some credit unions offer this type of account, but charge monthly fees or for ATM withdrawals, meaning they’re not good value.

An alternative to jam jar accounts is to open separate fee-free current accounts and split your money between these. It’s also worth looking at app-based banks that let you split your money into different spending pots.

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.

Remember, the FSCS compensation limit is £85,000 per financial institution, regardless of whether your money is spread across different accounts with the institution. And bear in mind that some banks might be operating under the same licence even if they appear to be separate companies.

Read our guide to keeping your savings safe.

It’s also worth remembering that 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.

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