I have bank accounts in three different banks.

Whether that sounds like a lot or a little to you, each account has a very specific reason for being opened.

Today I’m going to walk you through the different types of bank accounts I have, why I maintain a balance in each one instead of saving or investing that little extra money, and what traits you should look for in bank accounts.

If you can find bank accounts that contain 2 of these traits in 1, that’s great! 3 isn’t the magic number. But, your accounts should have these features, and I’ve never found a way to do with less than 3 bank accounts open. Here are those 3 traits…

A big bank for direct deposit

I opened up my checking accounts with Chase two years ago when I began working and using direct deposit. There was a $200 bonus for adding direct deposit to a new account within 30 days of opening it. A lot of big banks have similar sign-up bonuses with direct deposit.

I didn’t choose Chase just because of the bonus (like I said, I think a lot of banks have that). I chose it because I live in New York City where there are Chases on just about every block, and wanted the conveniences of a big bank. There are ATMs everywhere, my checks are processed quickly, and if I ever have questions, they have great support.

For a checking account, Chase is perfect. It keeps my liquid cash, well, liquid. I recommend everyone have a checking account at a big bank for the convenience.

A bank that reimburses your ATM fees

If you’re anything like me, spending money on ATM fees makes your blood curdle. Even if it’s only $2, it’s $2 I absolutely feel like I should not have to pay.

This is how I feel about credit card interest, too, but that’s a topic for another day.

Luckily, I live in New York, where there are Chases on almost every corner. So, I don’t usually find myself in a situation where I can’t go to my own bank’s ATM.

However, I still have a bank account that reimburses my ATM fees. All of them. No price limit and even in different countries!

A secret? I only keep $150 in this account.

Yep. I know it might sound a bit ridiculous, but that’s worth it to me to always have as a backup in case I need to take out cash. It’s especially useful when traveling abroad and using foreign ATMs. And, it never hurts to have a little extra money stored away.

If you can find a big bank that reimburses ATM fees (in effect, combining the two “types” above into one), great. But, typically, big banks won’t reimburse. Shop around a little.

An online savings account

Finally, I wouldn’t recommend for anyone to keep their savings in a big, commercial bank like Wells Fargo or Chase.

It’s not because there’s anything wrong with those banks. It’s just that because they are so big with so many locations and so many employees, they have a limit in their interest potential. All of that physical and human capital costs quite a bit of money. Money that, otherwise, could be your interest earnings!

Online banks get rid of the fees of tellers, store fronts, employees, etc., etc., etc. Therefore, their interest rates are almost always higher. Your savings will make you far more money in an online account.

Bonus: an online saving account with sub-savings accounts

For my online bank account, I use Capital One 360 and I’m obsessed with it.

Not only does it have a high-interest rate, it allows you to create sub-savings accounts for FREE so you can allocate how much of your money goes towards saving for a certain thing each month. Below is a screenshot of all the sub-savings I have with this one account.

You can read more about why I chose each category and how much I save into both in this post here.

This savings account is incredible for two main reasons:

1- It’s automated

This means that it’s connected to my checking account. Each month, the day after my paycheck gets direct deposited into my checking account, this account automatically pulls an amount I’ve given it from my checking and deposits it into my sub-savings. It literally could not be easier for me. The power of automation is incredible; it’s so much easier to save when it’s automatically done for you and you’re not having to budget and calculate your money each month to see how much you can save.

2- It has sub-savings

I absolutely love that I can categorize my savings. It makes it so much easier to envision how close I am to actually achieving my goals and it totally satisfies my inner planner nerd. I recommend everyone use this system.

Side Hustle Money

The system I use above all work with my income from my 9-5 job. My side hustle money isn’t as steady or consistent as my work’s paycheck. So, how does that fit into play in my personal finance system?

Ramit Sethi recommends that you actual splurge with 50% of your side hustle money because it’s how you stay motivated to keep earning extra. I definitely subscribe to this theory. Because I’m trying to pay off my student loans so aggressively, I don’t spend 50% of my side hustle money on splurges. Right now, I divide it up by about 70% of my money toward my “Pay off my Student Loans” category and the remaining 30% in my “splurge” category.

This is a win-win. I don’t rely on my side hustle money for my own life at all. So, anything extra is just to help me pay off my student loans quicker or treat myself more!

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