Author Topic: Cutting back my bank accounts  (Read 2172 times)

sixkids

  • 5 O'Clock Shadow
  • *
  • Posts: 71
Cutting back my bank accounts
« on: January 19, 2017, 01:07:14 PM »
So I'm categorizing my accounts, and I've come to the conclusion that I have way more bank accounts than I need. These are just checking and/or savings, and I have accounts with 8 banks.

1. Chase- primary checking account with all my bill pays and direct deposits. Premier plus tier, no fees
2. PenFed credit union- checking account with $3 in it and savings with $300.  Just sits there.
3. Local credit union- savings with the same $5 I opened it with 10 years ago.
4. Local credit union 2- this is my emergency fund. Has about $10,000
5. Local credit union 3- I don't even remember opening this account, but I apparently have it with $25
6. 5/3 bank- had this account since I was a kid. It's got $5-600 in it. I make a deposit ea few times a year.
7. USAA- checking and savings. I've got just over $700 in that savings and a couple hundred in checking. I use it to pay my car insurance. That's about it.
8. Navy federal credit union. Opened it long ago. Switched to USAA and just left it open. I think there's about $40 in that account.

My thought is to keep chase just because it's free checking and I have all my bill pay set up there. I have no loyalty to them, and they're honestly not terribly convenient for me, but it's simple and they have a good bill pay system.
PenFed I'm thinking I will keep as a car savings account
Credit union 1 I'm thinking I will close.
Credit union 2 will stay as my emergency fund. It's crappy .1 rate, but $10,000 doesn't get enough interest to make it worth moving. It's not conveniently located, but close enough that in an emergency, I could get there.
Local credit union 3 to be closed.
5/3 bank-  could probably close this one too. It's old, but it serves no real purpose
USAA- make this into a vacation savings account?
Navy federal-  close it?  Everyone loves navy federal, but they've never really stood out to me. Savings rate is 0.25%

Am I overthinking all of this? This will still leave me with four banks, which may still be more than I need.

Syonyk

  • Magnum Stache
  • ******
  • Posts: 3875
    • Syonyk's Project Blog
Re: Cutting back my bank accounts
« Reply #1 on: January 19, 2017, 01:23:25 PM »
Why would you keep separate banks for different purposes?  Just get something like Capital One 360 (formerly ING Direct) where you can create free savings accounts for different purposes with a few clicks.

And, yes, I agree that having a bunch of accounts with $25 or $50 in them is silly.

khangaroo

  • 5 O'Clock Shadow
  • *
  • Posts: 92
  • Age: 30
  • Location: Clackamas, OR
    • My Blog
Re: Cutting back my bank accounts
« Reply #2 on: January 19, 2017, 01:32:01 PM »
If you're using them as a tracker, you should be using a spreadsheet with only 2 accounts, one for checking and one for savings. I have a checking account with US Bank that I pay all of my bills from that account and an Ally Bank which is my savings account.

Not sure why you need a different account for each category, this just means you're not tracking/budgeting correctly. If you have $10,000 in a savings account that is for a future car and vacations with $7,000 earmarked for a car then you wouldn't take out $5,000 for your vacation.

I use the KISS principle when it comes to my finances - Keep It Simple Stupid. Cut the fat and get lean!

ysette9

  • Walrus Stache
  • *******
  • Posts: 5573
  • Location: Bay Area, CA
    • Insert Snappy Title Here (Journal)
Re: Cutting back my bank accounts
« Reply #3 on: January 19, 2017, 02:19:11 PM »
If I were you I would keep the USAA and a local credit union and kill the other accounts. We use USAA for almost everything and have been rather pleased. Every time I deal with them I find myself thinking "USAA gives good phone". Haha. Seriously though their people are the most polite, professional people I ever deal with for customer service. Just stay away from their investment stuff as their funds are expensive.

We have our emergency fund in the local credit union just to be hard to get to. It is nice also to have a place you can physically go to if you have to deposit a wad of cash from selling a car or similar.

Laura33

  • Handlebar Stache
  • *****
  • Posts: 2385
  • Location: Mid-Atlantic
Re: Cutting back my bank accounts
« Reply #4 on: January 19, 2017, 03:06:29 PM »
1.  You don't need all the accounts.
2.  You certainly don't need multiple accounts at multiple banks. 

My suggestions:

1.  Checking account used for routine expenses.  Choose the one on your list with no fees, decent ATM access, and an excellent online banking system.  Set up automatic deposits/withdrawals for everything.

     1.a.  If you are worried you might bounce some checks/payments some months, set up a linked savings account at the same bank with a couple hundred bucks in it so you can transfer over online if necessary.

2.  All other money in an online savings account with the highest interest you can find. 

Note that interest rate doesn't matter for the first account, because this is your monthly spend money; the only thing that matters here is no fees on the account(s).  OTOH, for all the money you are saving longer-term, you want the highest interest possible, so pile it all into that one account.  Spreading small pots of money across a bunch of different no-interest or low-interest accounts is just costing you time, aggravation, and the higher interest you could have earned.

rpr

  • Pencil Stache
  • ****
  • Posts: 646
Re: Cutting back my bank accounts
« Reply #5 on: January 19, 2017, 03:20:33 PM »

3. Local credit union- savings with the same $5 I opened it with 10 years ago.
4. Local credit union 2- this is my emergency fund. Has about $10,000
5. Local credit union 3- I don't even remember opening this account, but I apparently have it with $25

Credit union 1 I'm thinking I will close.
Credit union 2 will stay as my emergency fund. It's crappy .1 rate, but $10,000 doesn't get enough interest to make it worth moving. It's not conveniently located, but close enough that in an emergency, I could get there.
Local credit union 3 to be closed.


My guess is that CU1 is a savings (share) account, CU2 is a Money Market, while CU3 is a checking (draft) account. My credit union requires that you must have a Savings account in order to have any other accounts. It is likely that they will not let you close CU1 while keeping CU2. 


ubermom4

  • 5 O'Clock Shadow
  • *
  • Posts: 81
Re: Cutting back my bank accounts
« Reply #6 on: January 19, 2017, 03:41:53 PM »
  I totally agree -- I use the KISS principle when it comes to my finances - Keep It Simple Stupid. Cut the fat and get lean!

There is  no upside to multiple accounts at multiple banks and you increase the risks -- surprise fees, money is missing, etc. Multiple accounts require regular attention, even if you think they don't. All accounts that hold your money need to be reviewed monthly.

It's great that you are looking to make your life simpler. Good job.