Should You Keep All Your Money in One Bank?

Choosing where to keep your money is one of the most fundamental financial decisions you’ll make. While it’s easy to park everything in a single bank for convenience, doing so comes with both benefits and risks. In the U.S., where financial institutions offer various perks and protections, it’s worth considering whether diversifying your accounts makes sense for you.

One major advantage of keeping all your money in one bank is simplicity. Managing your accounts is easier when everything is under one roof—you can see your balances in a single app, automate transfers between checking and savings, and avoid juggling multiple logins. Many banks also reward loyalty with higher interest rates, better loan terms, and fee waivers for customers who maintain significant balances.

However, putting all your financial eggs in one basket has its downsides. The FDIC insures deposits up to $250,000 per depositor, per bank, per account category. If your total savings exceed this limit, keeping everything in one institution could leave you exposed in the rare event of a bank failure. While collapses are uncommon, as seen with Silicon Valley Bank and others, they do happen. Spreading funds across multiple banks can provide additional security and peace of mind.

Beyond deposit insurance, diversifying banks can also offer functional advantages. Some institutions excel in areas where others fall short—one may provide industry-leading high-yield savings accounts, while another offers superior customer service or lower mortgage rates. Using different banks allows you to optimize each part of your financial strategy rather than settling for a one-size-fits-all approach.

There’s also the issue of accessibility. If your bank experiences an outage, a security breach, or other technical difficulties, you could be locked out of your funds temporarily. Having a secondary account at another institution ensures you always have a backup, whether for everyday expenses or emergencies. Likewise, if you ever run into issues with a bank—such as frozen accounts due to suspected fraud—having another account elsewhere can be a financial lifeline.

On the other hand, managing multiple bank accounts requires extra effort. Tracking balances, monitoring fees, and ensuring you meet minimum requirements can become time-consuming. If convenience is your top priority, sticking with a single well-established bank may still be your best bet. However, if financial security, higher returns, and flexibility are important to you, diversifying your banking relationships can be a smart move.

Ultimately, the right approach depends on your financial situation and risk tolerance. While keeping everything in one bank is simple and often beneficial, spreading your money across multiple institutions can offer extra protection and strategic advantages. Weighing the trade-offs will help you determine what works best for your financial goals.