Pros and Cons of Having a Checking and Savings Account at the Same Bank

When managing your financial accounts, you may choose to keep both your checking and savings accounts at the same bank out of convenience. This strategy comes with pros and cons, and there are several factors to consider before deciding to hold all accounts at one institution.

Having both accounts in one place can simplify your financial tracking and make reviewing your overall financial goals easier. However, it may limit your ability to shop around or access banking features that are only available from certain financial institutions. Ultimately, it’s up to you to bank with an institution that meets your unique financial needs and goals.

Let’s review the pros and cons of having your accounts in the same bank—starting with the pros:

Pros:

Rewards and Savings Opportunities: Keeping your checking and savings accounts at the same bank could lead to combined reward systems that allow you to earn points or cashback. Consolidating your accounts could lead to fewer monthly fees and reduce your banking costs, as many banks offer discounted rates for customers with multiple accounts. A rewards checking program may include perks like bonuses for opening an account, making deposits, using your debit card, or even discounted interest rates on loans and credit cards. Meanwhile, a high yield savings account with a competitive interest rate can help you build your savings without requiring a minimum balance.

Simple Management: By using one financial institution for your banking needs, you can transfer funds between your checking and savings accounts quickly and easily, view your total balance across accounts, and set up automatic savings transfers without having to keep track of multiple apps or logins.

Qualifying for Loans and Credit Cards: If you’re looking to take out a loan or open a new credit card, having a good history with your bank might increase your chances of approval.

Banks often offer preferential terms and conditions to customers who use their services in the long run. Having multiple financial products from the same institution, like a checking and savings account or a credit card, could also indicate that you are a loyal customer.

Customer Service: By using more than one product from the same bank, you become more valuable as a customer, which may lead to more personalized service or faster response times when it comes to your accounts. The bank may even be willing to honor customer loyalty by refunding or canceling fees like overdraft or minimum balance penalties, should you need it.

While having your checking and savings accounts at the same bank may seem convenient and streamline your finances, it could also have drawbacks:

Cons:

Limited Banking Options: One disadvantage of keeping both accounts in the same bank is that it might limit the variety of banking services you could access. You might find that your bank doesn’t offer services you need or want, such as early direct deposit, wealth management, or credit monitoring services.

This may require using an additional service or even another bank account to meet your needs, which can be a hassle and negate the advantages of using one bank.

Potential for Fraud: Hackers are increasingly targeting financial institutions, and keeping all your accounts in one place could leave you more vulnerable to this type of crime. If your bank is compromised, all of your accounts and financial information could be at risk.

Paperwork: If all your financial products are linked to one institution, you may be inclined to stay there (even if there are better benefits available elsewhere) because switching can often lead to lots of additional form-filling and (online) paperwork. For instance, you’ll need to change all your automated payments and update your contact information to reflect your new bank.

Is it Better to Have Both Accounts at the Same Bank?

Keeping your checking and savings accounts at the same bank may come with certain benefits, but it can also limit your banking options. Ultimately, it’s important to weigh the pros and cons carefully. Consider what type of banking services you need now and in the future, as well as what kind of customer service and rewards you’re looking for in a financial institution. Doing your research can help you make an informed decision that best meets your needs.