2 Reasons to Keep Your Checking and Savings Accounts at 2 Separate Banks

Everyone should have a checking account because a checking account is where you put your money before you spend it or transfer it to other places (like a retirement fund). And everyone should have a savings account because a savings account is where your money goes to be ready for emergencies and to save for short-term goals.

It may seem really convenient to put your checking account and your savings account in the same bank. After all, why would you want to open up two entirely separate accounts and have to deal with managing both? In reality, though, there are actually a few really good reasons why these two accounts should be at two separate institutions.

Different banks excel at different things

One of the best reasons to keep your checking account and your savings account in different places is because it can be really hard to find one financial institution that has the best checking account and the best savings account.

You'll want your checking account to be at a place where you can deposit money easily and transfer money as needed to pay bills or use for other goals. You'll also want this account to be free of fees and ideally to offer other perks, like free checks or ATM reimbursement if you use an out-of-network ATM.

Your savings account, on the other hand, should be at a place where you can earn the highest yield possible while still keeping your money liquid and accessible as you need it. You may also want your savings account to be at a financial institution that offers other perks such as the ability to maintain separate sub-accounts or "buckets" for different savings goals.

The problem is, the chances are slim that you'll find a place where the savings account and the checking account are both the perfect fit. And that's especially true since some of the institutions offering the best savings account rates and perks may not even offer checking accounts (or don't offer anything special for their checking accounts anyway).

Rather than settling for second best (or worse) with either your checking or savings account, research account options independently to find the best place for each one.

You may be less tempted to spend your savings

There's another really good reason to introduce more separation between your checking account and your savings account. It's less tempting to spend the money in savings accidentally if you have the money at separate institutions since it's harder (and slower) to transfer the funds.

I used to keep both my checking and savings accounts at Ally Bank since the two accounts both offered pretty good features. But transfers between the two accounts were instant. Because of that, I'd find myself "borrowing" from savings sometimes by just moving the money right over to checking and rationalizing that I'd pay it back once my next paycheck was deposited.

When savings is at a different bank than checking, this isn't so easy. Usually, it takes a few days and a special request to move the money from one bank to another -- and that gives you more time to think about whether the move is really the right one. It also makes it feel like a bigger deal.

For both of these two reasons, it's really best to separate out these accounts. Research the best savings accounts and the best checking accounts today to find out where each belongs. Then get your money moved into these financial institutions ASAP to introduce that separation that maximizes the chances of both accounts serving their intended purposes.