Savings accounts with sub-accounts

Having a bank that makes it easy for you to maintain multiple savings accounts can come in really handy – it can make organizing your finances simpler, budgeting easier, and saving for specific goals a lot easier.

How does it work?

Banks that support multiple savings accounts make it easy to create sub-accounts and give them friendly names (like “Emergency Fund” or “Trip to Hawaii”), and also make it easy to do instant transfers between them (and your checking account). For example, my setup in Ally looks like this:

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As you can see – I have a checking account and three savings accounts (one for part of our emergency fund, one to keep money we set aside every month to pay for car insurance and registration, and one for big purchases). Every month, I transfer a set amount to the car savings account, then split whatever leftover money we have between big purchases and our emergency fund. This is really simple – it took about 10 minutes to set it all up on Ally, and I spend about 3 minutes per month managing it.

Why do it this way?

Setting your account up with multiple accounts makes it easy to keep money separated and know how much you have for various expenses/needs. It also makes it easy to keep your emergency fund separate and not accidentally (or purposely!) spend it on things that aren’t really emergencies.

Do all banks support it?

Not all do, and even fewer make it simple. We have a full list of them here, and the best ones seem to be Ally and Capital One 360. If you know of another bank that supports this, please leave us a note in the comments.

How many accounts should I have?

It is up to you. Some people like to have more granular savings goals – ie, saving for a trip or other specific thing. I prefer to just have a few – one for an emergency fund, one for all big purchases, and one for all expenses that are fairly large but only happen a few times a year (this makes our budget smoother).

Can’t I just track it all in a spreadsheet?

You certainly can, and it isn’t terribly hard to do so. Many people – including me – really like the convenience offered by having them separated in the account itself, though.

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