Many people find no use for a second checking account because it will only mean another bank account to manage. However, there are several reasons that may be cause for reconsideration.
A checking account generally serves as the command center for a person’s finances. Money goes in and out from wages to expenses, savings, and retirement.
The need for a second checking account is normally regarded as excessive and unnecessary. But for some, a second checking account can prove to be beneficial for their financial habits.
1. You want a backup checking account.
It is difficult to predict when something may render your primary checking account inaccessible. Maybe the bank had a technical error or you’ve become a victim of identity theft, which left your account frozen until the matters are resolved.
In that scenario, you’d feel financially handicapped. A second checking account would assure that you can remain current on all bills and expenses and that you can access cash immediately.
2. You want to earn interest on deposits.
The traditional bank account to save money and earn interest is a savings accounts, ideally one with a high interest yield. Federal rules limit the number of transactions in savings account to six per month.
Interest checking accounts from online banks such as ING Direct, Everbank, and FNBO Direct can deliver APYs that even beat high-yield savings accounts, while the funds are easily accessible. An interest checking account as a second checking account would make for a great emergency fund and back up checking account.
3. You want better perks.
If an advertised checking account has desirable features missing from your primary checking account, it may be worth opening that account (assuming you can handle the costs and fees, if any).
For example, your primary checking account is with Chase but the bank charges $2 for a withdrawal at a non-Chase ATM. If you tend to visit non-Chase ATMs, you can open an Ally Interest Checking account that refunds transaction fees at any ATM.
Or, if you use debit cards more than credit cards, you may opt to sign up for a Perkstreet Checking account with 2% cash back debit card rewards, which is becoming increasing scarce.
4. You want to withdraw more cash.
Depending on your checking account, you are limited to a maximum daily withdrawal limit that typically ranges from $500 to $1,000. For the average American, there is rarely an occasion when that isn’t enough cash. If you want to be able to withdraw more cash, a second checking account would extend cash withdrawal capacities.