Six Reasons You Should Have More Than One Current Account

*This is a collaborative post on reasons you should have more than one current account

Traditionally, people had just one current account and stayed loyal to their bank for life. I know my parents haven’t changed banks since I was born, so a pretty long time. But having more than one current account can be really useful.

The State of Pay report from Vocalink (part of Mastercard) in 2019 found that 40% of people had a secondary current account. The figure rose to 48% for account holders aged between 25 and 34 years old. Even just four years later I would guess that these figures would already be much higher.

A hard credit check is recorded each time you open a new bank account so it’s not recommended to open too many in a short period of time. To avoid any red flags leave a gap between applications, and don’t apply for an overdraft on each account.

Here’s why you should have more than one current account:

Different accounts have different benefits

We all use our bank accounts differently, and suppliers will offer differing benefits. If you have more than one current account you may choose one with better functionality for your day-to-day spending or better interest rates if you want to start saving money.

We chose to open an account with HSBC as you could deposit cheques through the app without needing to go in the branch. This is something my Monzo account didn’t offer. Then I have a separate business current account as it allows me to automatically save for my taxes, and submit invoices.

Have more than one current account as a backup plan

It’s always worth having a secondary way to access your money just in case there are any issues. It’s not unheard of for banks to have IT problems, or your bank card to not work. I remember a time when I had a Halifax account and their whole system went down and I couldn’t transfer money or do anything for almost a day.

With the possibility of a glitch or outage, it’s worth having a Plan B so you can access cash if your main bank account is out of action.

Have a separate account for bills

I’m a huge fan of having a totally separate account where all your bills and fixed expenses come out of that’s separate from your spending money.

All you need to do is work out all your direct debits and fixed expenses and transfer that amount of money into the household bill account each month. Then your bills and expenses can come out throughout the month without you having to worry that you have enough to cover them.

You can even save in this account for annual expenses like car insurance or subscriptions that are cheaper to pay in one go i.e. Disney+ or Amazon Prime.

You may want a joint account with a partner

There are no hard and fast rules as to whether you need a joint account with a partner, but they can be handy. Our joint account allows us to save for household things and pay for our food. And for us it just makes sense, but it may not for everyone.

If you do have a joint account for expenses this could be for household bills, rent/ mortgage, food, furniture, or larger expenses like holidays or a wedding.

While a joint account is useful it’s important to have more than one current account so you have your own money.

Have more than one current account for additional savings

Savings pots and accounts are easy to open alongside a current account. In my Monzo account, I have multiple savings pots with various different interest rates.

It can be beneficial to have more than one current account to accommodate different types of savings. And by spreading out your money you’ll get the best rates. One bank may have the best rate for instant access savings, whereas another bank may have the best ISA savings account.

Shop around and open the accounts that suit your savings needs the best.

Get cash for switching

Most bank accounts offer a switching incentive ranging up to £200 to switch your current account. So you could benefit from a new account and a cash thank you.

Before you switch make sure you know what you need to do to get the incentive. You’ll need to use the Current Account Switch Service (CASS) and usually switch at least two or three direct debits or standing orders to the new account. Some accounts may say you need to deposit a certain sum each month and that you need to stay with them for a certain period.

The great thing about the switching service is the new bank will do everything for you. We moved from Halifax to HSBC and got a nice switching bonus and they transferred all of our payments and bills.

Do you have more than one current account?