The notion of opening a second checking account may seem a bit unconventional, but hear us out. It’s an overlooked financial strategy that can profoundly impact your financial well-being by offering flexibility, organization, and peace of mind. It’s also much easier than you think. The only prerequisite to opening a second checking account is having a first! According to the Federal Reserve Survey of Consumer Finances, more than 92% of the U.S. population already has a checking account. And you don’t have to be a millionaire to open a second account.
Let’s explore some of the reasons doubling up on your checking accounts might just be the smartest decision you make this year.
Budget better
Keep it tidy
Multiple checking accounts can help tidy up your budget. Picture this: one account just for paying bills and buying groceries, and another for discretionary spending or saving up for that big ticket item you’ve had your eye on. You can separate your finances into distinct categories and make budgeting and tracking expenses much simpler. It’s like having separate closets for work clothes and weekend wear — everything is in its place.
Direct deposit your side hustle
The rise of side gigs and passion projects has become a defining feature of the modern workforce. Whether it’s driving for a rideshare service, freelancing as a graphic designer, selling handmade crafts online, or social media influencing, more and more people are diversifying their income streams and pursuing entrepreneurial ventures outside of their traditional 9-5.
Amid the excitement of launching a side hustle, it’s easy to overlook the importance of segregating those finances. By opening a dedicated account for your small business, you not only create a clear distinction between your two sources of income, but you also simplify your budgeting, accounting, and eventual tax preparation. You can easily track incoming payments from clients or customers, monitor business expenses, and set aside funds for taxes or business-related purchases.With such a clear view of your finances, that side hustle might just become your main hustle.
Protect and save
Secure your cash
Having a second checking account also provides an additional layer of security. You can use one account for online transactions, reducing the risk of exposing your primary account to potential fraud or unauthorized access. This separation can limit the impact of any security breaches. For instance, if you become a victim of fraud or get locked out of your account, having a second one as a backup will give you peace of mind and limit liability.
Additionally, keeping certain transactions separate can also enhance financial privacy. For example, a second checking account offers a discreet solution if you share a joint account with a partner or family member but want to maintain financial autonomy for personal expenses. Saving for a surprise for your spouse? A second account can keep those charges a secret until it’s time for the big reveal.
Emergency backup
Not all of life’s surprises are the happy ones we mention above. We’ve all been there — an unexpected expense rears its head and suddenly, your checking account is looking a little lean. That’s where your second checking account swoops in to save the day. Knowing that one account is stocked with emergency cash helps keep you focused and less likely to dip into your everyday cash for impulse buys. Your future self will thank you for maintaining financial stability during challenging times.
Jumpstartyour goals
An added bonus
Some banks offer incentives or preferential services for customers with multiple accounts. This could include waived fees, higher interest rates on deposits, or discounts on loans or credit products. Maintaining a positive relationship with your bank through multiple accounts may open opportunities for better financial benefits. Wintrust Community Banks offers a $300 Total Access Checking bonus1 with qualifying activities.2 A minimum deposit of $100 is required to open an account, with no minimum monthly balance or monthly maintenance fees.
Short-term goals with long-term impacts
According to a 2023 survey conducted by Payroll.org, 78% of Americans live paycheck to paycheck — leaving many at a loss for how to save or invest after covering their monthly expenses. Though it may seem impossible, the key is to start small. A second checking account keeps any amount of savings visible (no matter how small), providing an added incentive to continue setting money aside when possible.
Take control of your finances today by exploring the option of a secondary checking account with a Wintrust Community Bank.
