Q I'm thinking about opening a third savings account. I have a savings account at a credit union where I get my car loans. I also have an online savings account that nets about 4 percent interest. I'm thinking about opening a savings account with the bank where I have my checking account to make it easier to save and transfer money. Can having multiple savings accounts be a bad thing?


A There's nothing wrong with having multiple savings accounts (so long as you aren't incurring more fees). What's important is that you are salting away money.

But the real question is why have multiple savings accounts? What advantage are you really getting? Not much is my general answer.

Multiple savings accounts can make sense in some circumstances. I have an acquaintance who had many savings accounts, because he was bringing his spending under control and multiple accounts helped him better manage his money. I don't know if he needed so many accounts, but it worked for him.

Most people find it easier to oversee fewer accounts. And in the Internet era, it's easy to transfer money from one account to another or from one financial institution to another. For example, you could just have a checking account at a bank, a savings account at an online bank offering a higher interest rate (and easy access), and a money market mutual fund as the place where you put your not-to-be-touched savings.

Nobody's getting much interest on savings-type accounts these days, either. Shopping around will get you a fractionally higher rate, but not by much. This could change if short-term interest rates climb.

You're not doing anything wrong. But I'd vote for financial simplicity.

Chris Farrell is economics editor for American Public Media's "Marketplace Money." Send questions to cfarrell@mpr.org, or to kaching@startribune.com. Put "Your Money" in the subject line.