:max_bytes(150000):strip_icc()/GettyImages-1382266060-9dd6b8295e9b4af58926e1b06290bcc6.jpg "Is It Smart To Have Multiple Bank Accounts? Yes, And ‘Soft Switching’ Is Trending Among Savvy Consumers")
:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-1382266060-9dd6b8295e9b4af58926e1b06290bcc6.jpg)
Key Takeaways
- Many people open new bank accounts without closing their old ones, a trend known as soft switching.
- Having multiple accounts can help you take advantage of higher interest rates, protect larger balances, and keep your money organized.
- Pay attention to bank fees, balance requirements, and dormancy rules when you open a new bank account if you keep your old one.
Soft switching is the trend of opening a new bank account without closing your current one. This allows you to, say, try new account features or a higher interest rate without disrupting your financial setup. It’s OK to have more than one active account as long as you understand each bank’s rules.
What One Bank Doesn’t Know Won’t Hurt Them
Instead of completely changing bank accounts—whether checking or savings—many people are adding a second or even third account from another bank to see if they get a better experience. This strategy is an easy way to test new apps or try out different fee structures without disrupting your direct deposit or bill pay set-ups.
Gary Zimmerman, founder of MaxMyInterest, said that savvy depositors often open accounts at multiple banks or credit unions. He says that when you spread cash across multiple depository institutions, you can benefit from increased deposit insurance, greater liquidity, and higher interest rates. “Over time, earning a competitive yield on your cash can help you earn thousands of dollars of extra interest income,” he said. That extra flexibility and cash is a big reason soft switching is increasingly popular.
Your everyday checking account may already have autopays and a transaction history built in, and you don’t have to lose that. Many people hold onto their original accounts out of convenience. Soft switching lets you explore something better without risking a missed payment or spending hours updating all your accounts.
How to Soft Switch Banks Without Issues
Soft switching works best when you understand some basic banking rules. For example, typically only checking accounts have monthly fees, whereas most online savings accounts have no monthly fees or minimums. So you’ll want to keep details like that in mind before you move money to another account.
Before opening extra accounts, research your options. Read the fine print and note:
Be mindful of dormancy rules, too. “So long as your bank accounts don’t come with any monthly fees, there’s no reason to close accounts,” Zimmerman said. “Just make sure you keep some money in each account and make at least one transaction per year so that your accounts don’t go dormant.” A small transfer, debit card purchase, or automated savings move is usually enough to keep the account active.
Note
A separate bank account can offer more privacy and autonomy over your financial life, especially if you want a clean slate or more control over where your information is stored.
If you want to try a new bank account, you can start slow. You can move one bill at a time or route just part of your direct deposit. If you are looking for higher interest rates, consider keeping your main checking and treating the new account as a high-yield home base for extra cash. Most bank accounts can be opened online in minutes, which makes soft switching easier than fully switching banks.
The Bottom Line
Soft switching is a way to explore other banking options without upending your current bank setup. You can chase higher rates, try out new apps, or compare features while keeping your primary checking account. If you are aware of fees and keep each account active, having more than one bank account can be an easy way to build more flexibility into your financial life.
