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Multiple HY Savings accts?

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  • Avatar Bonez 
    Participant
    Status: Physician
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    Joined: 04/02/2016

    Any upside or downside to having more than 1 high yield savings account? I have an Ally accout currently for my emergency fund with 3+ months all expenses. I will be getting married next month and my soon-to-be wife and I want to start a joint account to save for a house downpayment. For some reason it feels better for me to have a separate account for this as opposed to lumping it in with our EF. Any reason not to have more than 1? Any reason its a good idea? Something better than a HY savings account to use? Thanks.

    #227253 Reply
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 1209
    Joined: 02/11/2019

    Just makes things more complex.  Another site to remember login info for.  Another item on your taxes.

    I would much rather keep it all in 1 account and just use subtraction as needed to keep it straight in my head 🙂

    “Never let your sense of morals prevent you from doing what is right.”

    #227255 Reply
    Liked by AZPT, CordMcNally
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2477
    Joined: 01/03/2017

    One account certainly makes things easier with log-ins, taxes, etc. Having a separate account will probably cost you less than an hour over the course of a year.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #227258 Reply
    Liked by Lordosis
    Avatar Peds 
    Participant
    Status: Physician
    Posts: 3946
    Joined: 01/08/2016

    Is there a reason? No.
    Could you use Excel? Yes.
    Can you do it anyways ? Sure.

    #227259 Reply
    Liked by Lordosis
    Avatar spiritrider 
    Participant
    Status: Small Business Owner
    Posts: 1783
    Joined: 02/01/2016

    Just have more than one account at Ally. Solves all the above objections. People may say it is all mental arithmetic. Personally, I find it helps to segregate. At one time, I had a property tax account, car payment to myself account and a contingency fund account. Ally even lets you label the accounts.

    #227274 Reply
    Avatar Bonez 
    Participant
    Status: Physician
    Posts: 116
    Joined: 04/02/2016

    Great idea. I never thought about opening multiple accounts with Ally. For some reason I just feel better about keeping things in different buckets: Emergency fund, house down-payment, next car savings acct (since mine just hit 150k miles).

    #227353 Reply
    Vagabond MD Vagabond MD 
    Participant
    Status: Physician
    Posts: 3338
    Joined: 01/21/2016

    Nope, I have multiple.

    "Wealth is the slave of the wise man and the master of the fool.” -Seneca the Younger

    #227354 Reply
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 1209
    Joined: 02/11/2019

    When you have tons of cash it makes sense to have multiple accounts for the FDIC insurance

    “Never let your sense of morals prevent you from doing what is right.”

    #227358 Reply
    Lithium Lithium 
    Participant
    Status: Physician
    Posts: 1132
    Joined: 02/15/2016

    If you have anything close to six figures in cash, Ally isn’t really that good a choice right now.  I’ve moved my EF to Wealthfront which earns 2.57%.  I can live with the extra login and waiting a couple of days between transfers.

    #227363 Reply
    Jaqen Haghar, MD Jaqen Haghar, MD 
    Participant
    Status: Physician
    Posts: 190
    Joined: 07/27/2017

    I too keep multiple bank accounts, some high yields and a local.   It helps to spread risk around a little, especially if you exceed 250K for single, or 500K for joint accounts.  But even if you didn’t, I think it’s a good idea to have access to more than one account.

    It’s a few extra 1099s at tax time, which really doesn’t increase complexity, and there really isn’t any increased time commitment.

    But it depends on how cautious (paranoid) you are.

    #227475 Reply
    Avatar bean1970 
    Participant
    Status: Physician
    Posts: 507
    Joined: 07/12/2017

    downside is just having multiple accounts.

    before banks…pirates buried treasure in different spots….  in today’s era….it is really no different…. FDIC insurance will protect against the bank collapse…(use multiple accounts when you start hoarding cash and go over FDIC limits)…..but other than banking collapse probably a more realistic threat is global cyberterrorism and hacking in your account or just regular fraud (churning debit card numbers and withdrawing your cash/fraudulent check writing/ etc….)…spreading your pirate treasure around mitigates some of this risk which is mostly small but not zero…..

    #227493 Reply
    Jaqen Haghar, MD Jaqen Haghar, MD 
    Participant
    Status: Physician
    Posts: 190
    Joined: 07/27/2017

    I worry more about digital account problems and hacking causing delayed access to funds.  I’d bet the bank or FDIC isn’t going to be returning lost funds in a very timely manner, though eventually, with some effort, you’d likely recover them over time.

    But I have to admit, I am into security, adverse event planning, and redundant systems…. it’s not just a bank account thing in my case.

    I envy the ultra relaxed, but in the occasional emergency they envy me back.

    #227581 Reply
    Avatar EntrepreneurMD 
    Participant
    Status: Physician
    Posts: 118
    Joined: 06/10/2019

    Multiple checking, savings, brokerage, CD accounts.

    Good reason is government insurance limits ie risk management purposes.

    #227834 Reply
    Avatar Katiek 
    Participant
    Status: Other Professional
    Posts: 3
    Joined: 06/17/2019

    I tend to prefer simplicity and as I’ve gotten older I’ve tried to clean up the stray cats and dogs accounts I accumulated over the years.  However, a separate account for a down payment might be worth it just for motivation purposes – it also helps keep those funds separated so you’re less likely to view them as extra emergency funds.

    I also like the idea of having at least two or three separate accounts.  I’ve heard stories from friends of people getting locked out of investment accounts for supposed “suspicious activity” when the activity was perfectly normal.  These situations were all cleared up eventually, but in at least one case it took weeks.  I like to have at least more than one account to make sure there is always an alternative in case there is a delay accessing a particular account for some reason.

    #228762 Reply

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