🏦 How Many Bank Accounts Should You Really Have?

The smart way to split, save, and simplify your money

Author

The Money Edition
May 13, 2025 • Estimated Reading Time: 4 minutes

🌟 Hey there!
Ever wondered if you're doing it right when it comes to the number of bank accounts you hold?
Too many, and it’s a juggling act. Too few, and you risk mixing up your goals, bills, and spending.
Let’s clear the confusion and find that sweet spot — so your money works for you, not the other way around.👇

💡 Why You Should Have Multiple Bank Accounts

Having more than one bank account isn’t about being fancy — it’s about intentional money management. Here’s why it helps:

  • 🎯 Budgeting Clarity: Separate your expenses (bills, rent, groceries) from your discretionary spends (shopping, dining out).

  • 🚨 Emergency Ready: A dedicated emergency fund ensures you're not dipping into savings when life throws a curveball.

  • 🔒 Savings Discipline: When savings are kept apart, you're less tempted to touch them.

  • 📊 Goal Tracking: Planning for a trip, a new laptop, or a wedding? A separate account makes it easy to track your progress.

🧩 The Ideal Setup (for Most People)

You don’t need 10 accounts — just the right ones with clear roles:

  1. Primary Spending Account:
    For salary credits and daily expenses. This is your go-to account for routine debit card use, UPI transactions, and quick transfers.

  2. Fixed Expenses Account:
    Automate rent, EMIs, subscriptions, utility bills, and insurance payments from here. Keeping this separate ensures you never miss a critical due date and prevents overspending from your main account.

  3. Emergency Fund Account:
    Park 3–6 months of basic living expenses. Use a high-interest savings account or a liquid mutual fund. This account should be easily accessible but separate enough to not tempt you for non-emergencies.

  4. Short-Term Goals Account:
    Saving for a vacation, a new phone, or festive gifting? This account helps you track and achieve these smaller, time-bound goals without interfering with other savings.

  5. Long-Term Wealth Account:
    Link this to mutual funds, SIPs, PPF, or recurring deposits. This is your wealth creation engine — where consistent investments compound over time.

Optional Add-ons:

  • Joint Account for shared household expenses if you’re married or living with a partner.

  • Business/Freelance Account if you earn from a side hustle, freelance gigs, or run a small business — keeps personal and professional finances distinct.

Note: It is always suggested to have at least 3 different types of account. Can be the one suggested up👆 or you can try mixing up some.

⚠️ Common Mistakes to Avoid

  • Mixing everything in one account → Often creates confusion and mismanagement.

  • Forgetting dormant accounts → May lead to penalties and heavy fines.

  • Using savings account as investment → You can lose your growth.

  • Not automating transfers → Leads to inconsistent saving.

📰 In The News

A new RBI report reveals that India now has over 2.2 billion individual savings accounts as of 2024 — a sign of rising financial inclusion, driven by schemes like Jan Dhan Yojana and digital banking growth.

But there’s a catch: 30% of these accounts remain inactive. Experts say that while more people have access to banking, many lack the know-how to manage multiple accounts effectively. The result? Poor planning, unused funds, and missed financial opportunities.

🧠 Expert View

"Treat your bank accounts like labelled jars — each with a job. It creates discipline and clarity."

— Rachana Ranade, Finance Educator

She adds that automating transfers between accounts can eliminate decision fatigue and boost long-term financial health.

⚡ Quick Tip of the Week

✅ Use nickname labels or descriptions on your accounts and banking apps (e.g., "House Rent A/C", "Travel Fund")

— it’s a game-changer for visibility and motivation.

🧾 Final Thought

Your bank accounts aren’t just places to park money — they’re tools to organize, simplify, and grow your financial life.

So go ahead — label your jars, automate your flows, and start building a system that supports your goals.

Until next time,
The Money Edition
Helping you swipe smarter, not harder.