The Case for Multiple Savings Accounts

There’s a very straightforward case for multiple savings accounts, and it’s this: if you have more than one money goal, you need more than one savings account. (If you only have one money goal, feel free to skip this one entirely!) Here’s why, plus the four major benefits you’ll see with multiple savings accounts.

I’ll admit it: I’m a self-confessed savings account hoarder. Not only do I have more than one savings account, I actually have seven savings accounts.

I’ve got one account for each of my savings goals:

Before I went Full Crazy Personal Finance Lady, I had three savings accounts, total, and two of them were my RRSP and my TFSA (because without knowing anything else about either account, I opened both because “that’s what adults do.” Bad reasons, I know.)

The other savings account was my catch-all emergency fund, vacation fund, gift fund, new-running-shoes fund, and I think it even covered a new desk one time. You can see how well that worked out for my emergency fund here, but let’s just put it this way: the balance never really got beyond a certain point, and every time it did, something “came up.”

Because something always “comes up.” That’s just life, and that’s especially just life when you have one savings account taking care of all of your savings goals.

For a long time I kept at it, and figured if I just saved more, the balance would go up someday. It turns out, things kept coming up, and that balance remained pretty stuck at its natural $2,000 top balance. Anything above that somehow ended up getting spent – probably because I was so used to the account staying at that dollar amount.

It wasn’t until I switched to Tangerine and opened extra savings accounts that I saw any of my accounts creep past that $2,000 mark and stay there – which is an excellent thing, because my goal for my emergency fund is over $8,000, and let’s not even get into how much I’m trying to save for a house downpayment.

If you – like me – have multiple savings goals, even if they’re less than fully defined?

Your first step to achieving them should be separating them from each other. Whether it’s using a detailed tracking spreadsheet or straight-up getting more savings accounts, this is a must-do step.

Beyond the straight up benefit of actually saving my savings, here are four other benefits you’ll see if you have more than one savings account.

You Can Earn More Interest

With my savings accounts tidily organized to align with my different goals, I have a good idea of which ones might need to be tapped into quickly, and which ones need less frequent access. The accounts that I don’t need to touch that often – specifically my emergency fund and my house downpayment savings – are actually kept with an entirely different bank. I’ve got them stashed with EQ Bank, earning a guaranteed 2% interest until I need them.

You Can Set Distinct Goals

Not only do I know what my savings goals are for each account (here’s how I calculated my emergency fund goal and my dog’s emergency fund goal) my banks know them, too.

EQ Bank shows me the dollar amount I have left to reach my savings goals right in the dashboard view, so my savings goals are always top of mind when I log in.

Tangerine lets me set a savings goal for each account, and actually shows me a visual graph of when I’ll be able to reach it based on my current automatic contributions.

A look at my Tangerine savings goal tool, calculating when I'll have saved enough for my dog's emergency fund.

As you can see, I’m within striking distance of The Dog’s emergency fund being fully funded. I cannot wait.

You Can Spend Your Savings Appropriately

August was a spendy month for me. With vacation ringing in at over $1000, my savings rate took a hit, mainly because I withdrew from my vacation-and-gifts savings account to cover a big portion of the costs. (I may or may not have also used that account to cover an upcoming gift, but the recipient reads this blog, so shhhhh.)

That said, when I knew I’d need to dip into my savings, I knew exactly which account to pull from, and how much I had available.

I mean, it’s not called vacation-and-gifts savings for nothing.

You Can Stay Motivated

I’m not going to lie, when the timeline for (potentially, if all goes well) buying a house got shorter, my initial instinct was THROW ALL THE MONEY TOWARDS THE HOUSE GOAL.


I wish I was kidding, or exaggerating.

It was only because I’ve got such clearly defined savings goals, that are all deeply important to me in their own way, that I was able to remain calm (or more realistically, become calm after the initial freakout) and continue with my preset contributions for all of my other accounts. It certainly helps that my goal for The Dog’s emergency fund is thisclose to being achieved, and that Tangerine’s nifty savings goal tool tells me I’m 94% of the way there. Once I’ve officially reached that goal, then and only then will I shift my monthly contributions from that account towards the house downpayment.

My current progress saving towards my dog's emergency fund.

So today, if I’ve convinced you that setting up at least one additional savings account is a good call to help you achieve what you want to with your money, I want you to actually do it. Go open just one additional savings account with your bank (shameless plug, it’s ridiculously easy to do with Tangerine, and the same goes for EQ Bank. What can I say, I like my banks.)

Do you have multiple savings accounts – or have you figured out how to make a single savings account work for you? I’d love to hear about it! (There must be other savings account hoarders out there. I can’t be the only one.)

PS. As of today, I’ve officially been tracking my spending for one full year. Stay tuned for all the gory details next week!