Why multiple banks can sometimes be the best decision

People will often overlook the value of working with multiple banks when it comes to choosing the right savings account for their money.

Certainly, we understand the appeal of keeping your money all together at a single bank. It’s convenient. Everything is neatly laid out in a single statement. There’s only one online banking platform to learn. Maybe there’s even a branch near your house. 

But when it comes to savings, “easier” could be shutting you off from opportunities to earn higher returns, access to benefits you may not be aware of, and the chance to increase your savings discipline. So, keep the following thoughts in mind as you search for the right savings account for your needs.

Find a better savings rate
Your primary bank may be meeting all your checking needs but, that doesn’t mean it can also offer you the best annual percentage yield for your savings. First, the standard savings accounts offered by most banks generally earn a negligible 0.01% interest or so. And second high-yield account rates are so competitive, chances are that you can find a better rate if you just take the time to look.

Also, remember that sometimes when you do find an account with an attractive rate, it can come with a sizable minimum balance requirement or monthly fees that can eat into your gains. While this may not be a deal-breaker for you, it’s always a good idea to balance rate considerations and fees against access to your money. Finding a high-yield rate with a low minimum balance requirement is always preferable.

Organize those savings goals
Many people are not saving for only one reason--they’re saving for many reasons. Retirement. Emergency funds. Vacation. Home Improvements. The possibilities are endless. But if your savings are all in one savings account (even a high-yield savings account), it’s easy to lose sight of these individual goals.

Instead, consider the benefits of giving each savings goal its own account to help bring focus to each effort. You simply need to find the right account for each goal —and as you might guess, you need to shop around to find the accounts that best fit your needs. Santander offers a helpful savings calculator to assist with your search and explore different savings scenarios offered by different providers.

Pump up your savings discipline
It’s only human to succumb to temptation. Seeing your money grow as you save can be encouraging, but more often than not, it also creates an “urge to splurge.”

Creating a separation or “firewall” between your accounts helps you avoid the temptation to spend and keeps your savings discipline strong. Which is yet another argument for having your high-interest savings account at another bank, away from your more transactional banking activity.

Increase your financial security
The Federal Deposit Insurance Corporation, or FDIC, protects your money with up to $250,000 in coverage, and all reputable banks in the U.S. offer this to depositors. But what you may not realize is that this coverage does not cover each account, but rather each individual account holder across all of their accounts.

Out of all the good reasons to diversify your savings accounts across different banks, this one is probably the most important. By simply depositing your money at a new banking institution, you automatically receive FDIC coverage for another $250,000. This added protection will give you complete peace of mind that all of your money will be safe as it grows. Visit FDIC.gov for more information.

We realize where you place your savings is an important and often difficult decision. So, we hope these ideas will help with this process. Please don’t hesitate to contact us if you have any questions.