1 bank account VS 2+ bank accounts ????

[lesnar]

Most people have one banking account (maybe two for savings). However, is it really necessary to have more than 2 bank accounts or more? What are the benefits? Is it better to spread your money out than putting them all in one?? just curious.

[grant]

You get to pay extra banking fees, which reduces the burden of having too much extra money.

[notanexpert]

Some people with more than $50k sitting in cash (:confused:) will tell you that they need more bank accounts because the CDIC limit is 50k. Since we have so many banks going bust every day in Candada, there might be something to it... :confused:

[konfusion666]

most people have "do business with" more than 1 bank. which is what i think you meant. the first bank is probably a regular bricks & mortar outfit, one of the big 5 - the second bank would probably be a no-fee virtual bank (so grant's comment above wouldn't apply).

[Junk Food Junkie]

I find it's easier to organize finances with more than one account, as each one serves a purpose, and some banks have better offers than others.

[gman]

In the old days (when there is no service charge), one of my colleague had many bank accounts:

1. usual expense.
2. vacation fund
3. computer equipment fund
4. home improvement fund
5. entertainment fund
etc

She basically used different bank account to do her money allocation. If the vacation fund did not have enough money, her family wouldn't go for vacation. If the entertainment fund did not have enough money, she would not buy a new TV.

[Octavius]

most people have "do business with" more than 1 bank. which is what i think you meant. the first bank is probably a regular bricks & mortar outfit, one of the big 5 - the second bank would probably be a no-fee virtual bank (so grant's comment above wouldn't apply).

+1
BMO for B+M stuff if I need it (only checking, no fee thanks to being a student until 2010 (well, at least that's what's on my Carleton U Student ID :D ). I use it in case I need real banking services

PC for actual checking and primary vehicle for savings accounts due to 4% interest


I find it's easier to organize finances with more than one account, as each one serves a purpose, and some banks have better offers than others.

+1 as well

If I want to save money up for something, having a separate account set up for that one expense makes it loads easier to organize finances.

[sexpuppet6000]

i have 2+ accounts. all with perfectly good reason too. :cheesygri

[TeriyakiJack]

I'm have more than 1 account. When some accounts cost you no money to have (or pays you to have sometimes) , it doesn't hurt to have it.

Why be a sucker and give all your business to one bank, they bank (pun intended) on their customers who like convenience, so they make even more bucks when there are better deals out there for each specific need.

[ANDREWX]

Hi,

I have accounts at 4 banks.

The reasons: every bank has some advantages and disadvantages.

For example:

PC financial

Advantages:

4% saving account, no fee checking account, 4% RRSP account (not locked in)

Disadvantages: no branches, no tellers.

All major banks has different fees but have many branches.

For example, TD charges fee if there is less than 500 dollars on savings account.

Regards,
Andrew.

[SuperCM]

1. usual expense.
2. vacation fund
3. computer equipment fund
4. home improvement fund
5. entertainment fund


Couldn't the same be achieved by simply opening up multiple accounts?

Anyways, before I use to have different accounts at different banks, however, one day I just decided to consolidate them to one bank.

At first it was simply to earn a tad more interest, since I kept minimums at each bank to avoid monthly fees, I figure why not bring it together so I'd have a little more to dump into ING.

I think that bringing your accounts together into one place strengthens your relationship with that bank. By having greater worth, one would think they'd work harder to try and please you to keep you there. For things like getting accidental fees credited or perhaps a slightly better rate for things like loans.

Myself, I have an ING Direct account with a laddered GIC system going. I consider that my contingency fund for things like losing my job or something. Due to the staggered nature where each month a 1-year GIC matures, it avoids the temptation to just dive into it. However, ING's flexibility does allow that.

The rest of my business is with TD Canada Trust. My pay gets dumped into there and then streamed off into an RRSP, a low-risk mutual fund, and a medium-risk mutual fund. The plan for the medium-risk fund is to pay for longer term purchases, such as tvs or appliances down the road.

The low-risk mutual fund is to pay for annual things like taxes, house and car insurance. These sort of things sometimes charge you interest if you take a monthly payment option. By building it over the year, I can withdraw the full amount and avoid any penalties and then the fund slowly replenishes itself for next year.

[bellboy26]

The average Canadian deals with 3.4 financial institutions.

[pitz]

I used to have over 25 different accounts with more than a dozen institutions. Stuff that I set up because I 'saw a good deal', or were set up for me as a kid because "grandma wanted to get the best rate on a GIC on the kids' birthday money".

Basically put, it became too horrendous at tax time, managing cash became an exercise in stress, and stuff wasn't getting done on-time. So now I am down to 5 accounts (a LOC, RRSP mutual funds acct, non-RRSP brokerage, US dollar chequing, and a VISA card) and things are much easier to handle. I estimated my savings on fees and foregone interest, and tax preparation alone to be close to $2000/year.

[gman]

Couldn't the same be achieved by simply opening up multiple accounts?

It was multiple accounts in the same bank.

[lesnar]

haha i heard an interesting one today...when i asked the question he responded "to hide money from my wife", lol!

[BeaverLiquor]

Some people with more than $50k sitting in cash (:confused:) will tell you that they need more bank accounts because the CDIC limit is 50k. Since we have so many banks going bust every day in Candada, there might be something to it... :confused:

cdic limit has been going up every couple of years, it was $40k when i was in high school and it's up to $100k now. http://www.cdic.ca/

[lesnar]

cdic limit has been going up every couple of years, it was $40k when i was in high school and it's up to $100k now. http://www.cdic.ca/

if i have over $100k in my chequing account, the amout over the limit will not be insured? so, if i have $150k and $50k is 'stolen' or lost, they won't reimburse the amount? correct me if im wrong. thanks.

i noticed it says Savings Account....what about Chequing accounts?? is it insured as well? what is the limit?

[pitz]

if i have over $100k in my chequing account, the amout over the limit will not be insured? so, if i have $150k and $50k is 'stolen' or lost, they won't reimburse the amount? correct me if im wrong. thanks.

The first $100k deposited into a CDIC-insured institution, into an eligible deposit product is insured against default on the part of the institution. It may take a while for the auditors and the government to cut you a cheque, but eventually you will get your money back.

Amounts above $100k, and you line up with other unsecured creditors of the bank. You will receive payout before that of preferred shareholders and common shareholders, but your claims will be subordinated beneath secured creditors, employees, senior noteholders, and even the Canada Revenue Agency.

As a matter of interest, if you ever buy a 'principal protected note' from a Canadian bank, generally such a product is equivilant to an unsecured debt of the bank, and accordingly, will likely revert to the same value as the bank shares if the bank collapses, ie: zero.



i noticed it says Savings Account....what about Chequing accounts?? is it insured as well? what is the limit?

There is generally no distinction between chequing accounts and savings accounts, so long as the underlying 'investment' is cash or a term deposit for 5 years or less.

[lesnar]

thanks for the thorough response.


so if i have $200k, i should put half into separate banks so my money is fully insured? could this be a reason why people have more than one accounts?

[trolleydolly]

If you had $200,000 it would be smarter to invest it instead of leaving it in chequing accounts. I think most people have multiple accounts so it's easier to prioritize money.

P.S. A couple could also technically insure up to five accounts at any one institution - an unregistered on each, a registered (i.e., RSP) one each, and a joint unregistered one.