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Keeping your money in one bank

There are a few reasons that make keeping all your money in one bank seem like a no-brainer. On the flip side, while it might seem easier, there are some other benefits you might be missing out on. Let’s take a look.

Pro: Easier to manage your money

It’s always nice to simplify and streamline where possible, and banking is no exception. Dealing with only one bank will mean you’ll have a better, intuitive grasp on your transactions and expenditures, as it’s easier to remember checking and savings amounts for one account as opposed to multiple accounts across different institutions. A quick visit to your bank, or an online statement provided by the bank, will immediately (and conveniently) reveal all of your financial activity such as deposits, withdrawals, and expenses for any given period of time.

Pro: Personalized service

If you’re a loyal customer of only one bank, you may enjoy certain perks or rewards — one of them simply being that the longer you work with a bank, the more of a relationship you develop with those bankers. As a result, you may enjoy more personalized attention and service than you would if you were to spread your cash across multiple banks. Forming a good relationship with your bank can be helpful if you need to apply for a mortgage or another type of loan.

Pro: Enhanced security

Security is one of the biggest reasons for choosing to deal with one bank rather than multiple. Of course, your money is only as secure as the financial institution in which it’s stored, so it’s important to have some idea of the strength of your bank’s security measures. Customer ID, password, and secret questions are all examples of measures your bank may employ to protect your cash. In addition, terms such as withdrawal limits, account confidentiality, and receiving alerts on major account activity can all help keep your funds safe. When spread across multiple banks, these security measures may simply become too much of a hassle.

Con: You might be missing out on better deals.

If you’re limiting yourself to only one bank, you may miss out on more favourable terms and conditions you’d get elsewhere. For example, if you use an online bank, you may enjoy better interest rates on loans. Some banks also offer cash rewards for opening accounts, so it’s good to keep an eye out for new and worthwhile offers.

Con: Mitigate your risk of loss

If someone were to gain access to your account and sweep it clean, it could be detrimental. If you’re only using one bank and storing all of your money there, you risk losing everything you own in the event of hacking or theft. If the money’s spread out, then a loss is still painful to absorb, but at least you have backup accounts.

Spreading your money out over several banks

Spreading your money over multiple accounts may seem complicated, but it actually has a few good benefits you should consider. However, there are also some things you should consider that can end up costing you extra if you spread your money over multiple banks.

Pro: Take advantage of good terms and deals

If multiple local banks are offering cash bonuses, you could easily collect hundreds of dollars just from opening a new account or two. Of course, these bonuses are usually accompanied by conditions, such as depositing a minimum amount or setting up direct deposit.

Pro: Easier separation of funds

If you’ve been saving for multiple life events, like college, a new car, summer vacation, or a down payment on a house, having different bank accounts can help you better organize and allot your cash to save for a particular goal.

Pro: Increased protection against theft or bank failure

The thing about tying up all of your money in one bank is that you’re trusting it will be safe. In the event of identity theft, where someone might gain access to one account, you can take steps to secure your personal information. For starters, ensure that your accounts at other banks have different user IDs, passwords, and security questions to protect against additional losses. Also, if your bank were to have a security breach or go under, it could take time before you see your money again, even with insurance. Keeping your money in multiple bank accounts means that you’ll always have funds when you need them.

Con: It’s harder to stay financially organized.

If you find it difficult to stay on top of your finances when they’re streamlined and in one location, distributing your cash across multiple banks may prove more complicated. If it would be a bigger struggle for you to keep track of your cash in more than one location, you’re better off using just one bank.

Con: Potentially higher fees

While there are certainly options that don’t charge account fees, opening a new bank account with a specific bank may cost you. If your goal is to save rather than to spend, stick to banks that pay you to open an account, or you might be better off just sticking with your current bank.

Con: Lost interest

Some banks will offer a high rate of interest on the savings in your account. Of course, the more money that’s deposited, the more money you’ll be paid in interest. If you have more than one bank account and your money is distributed fairly evenly, you may miss out on some decent interest payments.

Con: Minimum balance requirements

It’s important to know the terms of a bank account prior to opening one. Some banks will require you to keep a minimum account balance at all times or require you to deposit a certain amount upon opening. If this doesn’t work for you or causes financial stress, select banks with no minimum balance requirement, or stick to your current bank.

What if you don’t want to just use a bank?

If you’d like to keep your money in more than just bank accounts, you’ve got options. Here are some other ways to store your money aside from opening multiple savings or chequing accounts.

Investment accounts

An investment account is more than just a location to store your money. Instead, you can expect quicker growth when you start investing than you would with just a savings account. 401ks, IRAs, and individual brokerage accounts are all examples of investment accounts where you can expect to receive returns. Of course, with an investment account comes the risk of market crashes, during which you can lose your money. A good rule of thumb is to allot no more than 10-15% of your annual income to investments.

TFSA accounts

TFSA (Tax-Free Savings Account) is a tax-advantaged account available to Canadian citizens 18 years or older. These accounts allow you to save on taxes, and can even hold certain investments (e.g. mutual funds, bonds, and cash).

Online banks

Many Canadians currently use or have used online banking. Online banks allow you to hold transferred money from existing accounts, and make transfers to other accounts (either yours or other people’s). This method of banking is becoming incredibly common due to its convenience, efficiency, and also sometimes come with lower fees as compared to traditional banks.

Final word

Ultimately, whether or not you decide to keep your money in one bank account entirely depends on your savings goals and financial habits. If your goal is to have your bank pay interest on your total balance, one bank account might be the way to go. If you feel more secure having your money in more than one place, two or more bank accounts may make the most sense. Take some time to think about which savings goals are priorities to make a decision that works for you.

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About the Author

Caitlin McCormack

Caitlin McCormack


Caitlin is a skilled freelance writer with an extensive background in finance writing for a number of finance blogs such as Her works can also been seen in American Profile, DeSoto Magazine, MotorHome Magazine, German-Life, and many others.

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