The ideal number of bank accounts

Whether you choose to have multiple bank accounts or consolidate, learn how to design a banking system that aligns with your financial objectives.

When it comes to managing personal finances, finding the right balance in your banking setup can make a significant difference. While there is no one-size-fits-all answer, understanding the advantages and considerations associated with various accounts can help you meet your financial goals.

For the recent graduate

Recent college graduates are likely a recent hiree and don’t have much capital or income to their name. If you find yourself in this grouping, there is no need to have anything more than one checking account and one savings account.

Your checking account should handle all daily usage, which may include daily transactions and paying monthly rent and utilities. This account should also handle your weekly or bi-weekly income. Consider choosing an account with little or no fees.

If you are a recent college graduate, consider setting up a high yielding savings account for an emergency fund. The purpose of this account should be to help you get through unexpected predicaments. Ideally, you'll have about six months of expenses saved in this account, which will accumulate interest. Unexpected emergencies may include a doctor's visit, unemployment, or car repairs.

For the family

As you get older, you'll likely start to accumulate more wealth through raises and investments. The more money you have, the harder it is to manage everything with one account. Along with your spouse or partner, you'll want to look into creating multiple joint savings accounts or certificates of deposit.

These savings accounts should be created with specific goals in mind, such as saving for a housing down payment or your children's future college tuition. Married couples should reach an agreement on a savings account and pool their resources together.

This changes with checking accounts. Both partners should have an individual account for daily transactions.

For the retiree

At this point in your life, your children have finished college and you've finished paying off a mortgage and the car. As a retired individual, your monthly income is likely coming from a 401k, pension or individual retirement account. Your working years were all about growth, and now, during the relaxation years, it's all about downsizing.

You'll still want a joint savings account, and it should have enough for six months of essential expenses. However, both the savings and checking accounts should be designated as transfer-on-death. In the event you or your spouse passes, the accounts will be handed over to the beneficiary without any delay. Accounts may be placed in probate otherwise.

After all, you're retired. You shouldn't have to spend these years worrying about all your financial accounts.

As your jobs and personal goals change, so do your finances. Fresh college graduates don't have to worry too much about wealth accumulation, but once they start a family, money management and savings are key. What works for one individual or couple may differ for another.